Transition & Handoff

Current state diagnosis and 6-month execution priorities.

Prepared By: Babak Mohammadi

The Structural Imbalance

New is being squeezed by massive inventory financing costs. Used is failing to retain gross after selling expense. Together, they are driving almost no profit per new unit sold ($9 MTD). The opportunity is already in the business—we just have to stop the leaks.

Where We Are Losing Gross

New Floorplan Expense

21.3%

of New Gross

National average is 7.7%. This gap represents a $707K identified profit opportunity.

Used Selling Gross

-$45.5K

MTD Loss

PUVR dropped to $641. Recovery target is $1,750 per unit.

Service A/R (91+ Days)

$180K

Total store net cash is -$1.41M. Collection discipline must tighten immediately.

Body Shop Gross

$11K

YTD

Volume collapsed (233 ROs YTD). We must identify if the cause is DRP loss or cycle time.

The $707K Leak: Inventory Aging

LIVE SNAPSHOT

The inventory is heavily aged overall, driving massive floorplan interest. 164 of 381 units ($9.43M in invoice) are sitting at over 121 days old.

Ford: 121+ Days Old

39.9% of inventory

  • 110 of 276 Total Units
  • Average Age: 127.9 days

Lincoln: 121+ Days Old

51.4% of inventory

  • 54 of 105 Total Units
  • Average Age: 157.5 days

6-Month Execution Priorities

Priority 1

Used Department Reset

Owner: Used Mgr / GM

  • ▹ Run a weekly aging and pricing walk with GM sign-off.
  • ▹ Relaunch CPO with clear unit targets (current mix is 0%).
  • ▹ Pull ad spend that is not converting to quality retail gross.

Data Req For Next Review

Aging buckets (0-30/31-60/61+), Avg recon cost/cycle time, Source mix.

Priority 2

Body Shop Recovery

Owner: Body Mgr / Fixed Ops

  • ▹ Map every active work source and recent volume trend.
  • ▹ Identify exactly where referral and insurance volume dropped.
  • ▹ Hold discretionary spend until throughput normalizes.

Data Req For Next Review

DRP status, Insurance referral breakdown, Keys-to-keys cycle time.

Priority 3

Locality & Showroom

Owner: New Dir / GSM / GM

  • ▹ Test margin position by model to protect gross without losing local deals.
  • ▹ Run weekly leakage review against Sound, AutoNation, and Kirkland.
  • ▹ Target the massive gap in Asian demographic sales (Ford at 2.0%).

Data Req For Next Review

CRM response time, Appt set/show rate, Lost-sale reason by competitor.

Priority 4

Defend Service Capacity

Owner: Fixed Ops Dir / GM

  • ▹ Track dispatch mix by day to protect Customer Pay access over Warranty.
  • ▹ Coach advisor workflow to hold speed and close rate.
  • ▹ Tighten retention and UIO follow-up cadence.

Data Req For Next Review

ELR by pay type, Dispatch mix by stall/tech, Advisor close ratio.