In the car trade, what you lack is usually customers, not cash — it is cash. A single unit ties up a large sum, and a slow sale breaks the cycle. Here is how dealers move more metal with less of their own money.
1. Know Your Three Turnover Numbers
| Metric | What it means | Healthy direction |
|---|---|---|
| Inventory days | Average days from arrival to sale | Shorter |
| Stock mix | How much cash sits in slow movers | Keep slow movers low |
| Collection cycle | Time from delivery to customer payment | Shorter |
Once these three are clear, you know exactly where cash is stuck — instead of a vague feeling of being short.
2. Four Ways to Stretch Working Capital
- Small and frequent: replace one big stock-up with rolling small batches — let logistics rhythm replace tied-up cash.
- Order-driven purchasing: sell first, order after. Waiting two extra weeks beats holding dead stock.
- Mix payment structures: part deposit, part terms — spend limited cash on your hottest models.
- Use export credit insurance: insured receivables unlock bank funding or supplier terms, usually cheaper than absorbing bad debt yourself.
3. Negotiating with Your Supplier
- Trade repayment history for limits: after several on-time payments, a credit-line request is far more likely to succeed.
- Start small: ask for a modest limit first — small facilities get approved faster.
- Get the first parts pack shipped with the cars: saves freight and parts working capital at once.
- Watch FX exposure: for deferred-payment orders, arrange currency in advance so swings don't eat your margin.
- Terms are not profit: they buy time, not margin — price the financing cost in.
Shunwei Auto tip: Rather than chasing a big credit line, cut your inventory days first. Halving turnover doubles your effective capital overnight.
Note: Expand with collections, not with orders. Dealers who load up on every big order are the first to break when payment delays hit.
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