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Car dealerships lean more on parts and service as gross profits slip
Industry data shows dealership gross profits have fallen from the supply constrained period of 2022, pushing operators to favor parts and service income that can help offset downturn risk.
CNBC Markets reports that car dealerships are leaning more heavily on parts and service to support profitability as dealership gross profits move lower from the supply constrained environment of 2022.
As margins have been pressured, dealerships are increasing their reliance on non vehicle sales income streams that can act as a stabilizer during weaker demand, according to the report.
The shift underscores how dealers are adjusting their revenue mix to build resilience, with parts and service generating profit more consistently than inventory driven sales during downturns.