A question that comes up all the time, and there is definitely a dichotomy to our industry. The OEMs don’t want to have one single vehicle in their warehouses (reduces their risk and keeps the shareholders happy) but they are perfectly fine with dealers being jammed up with stock.
Quite a few of the OEMs offer 90-120 days of free flooring, so if you do the math (and like me you don’t like paying interest) then that means we should be targeting 3-4 turns of our inventory. Then why is it that many of the suppliers push dealers to get closer to a 1.2 turn ratio? Antiquated ordering programs is one reason. A short term focus on share value instead of a long term focus on the brand is another. There are many.
For 2019, here are the new unit turn ratios by industry
– Powersports 2.1
– RV 2.0
– Marine 1.7 (this is criminal – some of these dealers should not be allowed to place orders)
The pandemic has been a gift to many dealers, providing the opportunity to clear out old stock (although not all have done this). My concern is that most dealers don’t have a forward strategy. They are just placing orders like the good times will never end.
What turn ratio do you shoot for?
#Powersports #Marine #RV #Inventory #Ordering