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Absorption Rate

Definition for new zealand 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.

New Zealand Context

In the new zealand dealer market, absorption rate operates within the context of Consumer Guarantees Act (CGA) and Fair Trading Act. Dealerships running Pentana, Titan DMS, Autobase encounter absorption rate in their daily workflow. DealerInt captures the decision layer around absorption rate that your DMS wasn't designed to track.

Related

US Definition · NZ Glossary

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