Used vehicle Stock Turn tells you the number of times that you turnover your used vehicle stock in 1 year.
When considering the improvement of operational performance with used vehicles, this KPI represents the kingpin around which everything else revolves.
This example below illustrates the used vehicle stock being turned 10.5 times per year. Quite simply, the faster you turn your used vehicle stock, the less money you need to invest and the more profit you will make.
Example:
A) Annualised used vehicle sales = 945 B) Number of units in used vehicle stock = 90 C) Annual Stock Turn = 10.5 (A ÷ B)
Discussion:
Stock Turn affects your business in the two areas that really matter. Improving this KPI tends to increase your profitability in used vehicles and also speeds your company's Circulation of Funds Employed thereby delivering a double benefit.
If you ignore Stock Turn, then all your profits could leak out of your business just as easily as water leaking from a colander because with the passing of time, your costs become larger and your profits smaller.