Absorption Rate
Definition for canada 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.
Canada Context
In the canada dealer market, absorption rate operates within the context of Provincial dealer licensing (OMVIC, AMVIC, SAAQ, VSA) and Competition Act — transparent pricing. Dealerships running PBS Systems, Quorum DMS, CDK Canada 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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