Absorption Rate
Definition for australia automotive professionals.
Absorption rate is the percentage of a dealership's total fixed overhead expenses covered by fixed operations (service, parts, and body shop) gross profit. A 100% absorption rate means the dealership's fixed ops departments generate enough gross profit to cover all dealership overhead.
Australia Context
In the australia dealer market, absorption rate operates within the context of Australian Consumer Law (ACL) and National Consumer Credit Protection Act (NCCP). Dealerships running Pentana, Titan DMS, Auto IT encounter absorption rate in their daily workflow. DealerInt captures the decision layer around absorption rate that your DMS wasn't designed to track.
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