Crisil SME tracker: For car dealers, workshop revenue can drive gains

Analysis reveals that workshop revenue accounts for two to 12% of total revenue of the CRISIL-rated

Passenger car and utility vehicle dealerships can boost profitability by shoring up their workshop revenues, an analysis of over 100 such small and medium enterprises rated by CRISIL indicates. 

Commission on showroom sales from original equipment manufacturers or OEMs (i.e. car-makers) and workshop revenues are the two main revenue streams for these dealerships. Showroom sales commission includes dealer commission on vehicle sales, finance payouts, insurance and registration commissions, while the workshop revenues comprise general servicing and sale of accessories/ spare parts. 

Lately, intense competition has compelled OEMs to cut costs, including reducing the dealer commissions. As such, these dealers operate