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Making Automotive News

Kia and BMW are Making Automotive News

JKRAdvertising / Auto Industry in the News /

July 14, 2014

Kia and BMW are among car manufacturers making automotive news these days. First up, we’ll examine Kia’s thoughts on possibly selling diesel powered automobiles here in the United States. After that, we’ll take a closer look at BMW’s billion-dollar plant in Mexico that is scheduled to begin production in 2019.

Kia Making Automotive News

According to AutoGuide, a well-respected publication whose headquarters are based in Canada, Kia is mulling the idea of bringing diesel passenger cars to America. Kia Motors America Vice President for Product Planning Orth Hedrick says that if it happens at all, it won’t be for three to four years.

Why so long? Mostly because the emissions standard differences between the United States and Europe – and Hedrick says that making the necessary changes to obtain approval in our country can be an expensive proposition. However, the European Union is said to be working on some new standards for 2016-2017, which would have them in line much closer to United States standards that they currently sit. If and when a decision is reached, we’ll let you know.

BMW Making Automotive News

Much like Nissan and Mercedes-Benz have done (and Volkswagen has done since the 1960s), BMW is making automotive news by investing a great deal of money in a new Mexican plant. This announcement comes despite the US State Department advising against all but essential travel to the San Luis Potosi area, where the plant will be located.

This will be BMW’s second vehicle production facility in North America; the other is located in Spartanburg, SC. BMW is not ignoring the South Carolina facility, either … they are investing $1 billion there in an effort to raise their production capabilities by a full 50%. It looks like this is a necessary, proactive move with the news that BMW’s sales are up 12% in the United States for the first half of 2014 when compare to the same time period last year.

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Post-Pandemic Dealer Gross Profits are Down – But They Don’t Have to Stay There!
March 13, 2024
It is no secret that dealer gross profits per vehicle are down sharply in the post-COVID automotive world. According to a recent article in Automotive News, gross profits of the six largest publicly traded dealership groups plunged significantly from Q4 2022 to Q4 2023. One of them was actually down 35% per vehicle!

The article explains: High interest rates, more expensive vehicles and a steadier post-pandemic supply chain continue to soften demand and bring it closer to pre-pandemic levels. Still, new-car buying has remained strong overall …

This means that, while sales volume is similar, overall bottom lines are lower for many dealers due to the reduced gross profits. What about your dealership?

Being Realistic
It’s time to turn the page! The time for dealers to simply be order takers for people willing to pay MSRP for a vehicle (and in some cases more) has passed and dealers have to work hard once again to achieve acceptable gross profits.

Selling a high volume of cars doesn’t control gross profits, no matter how much you wish this was the case. Correct processes and menu pricing – and strict adherence to them – do!

What kind of processes?
∙ Slow down the transaction! Your sales staff has to once again sell the customer on the features and benefits of every new and pre-owned vehicle on your lot.

∙ Your salespeople and managers should devalue the customers’ trade-in value (politely, of course) as much as possible. After all, if the customer expects you to lower your price, shouldn’t you be able to do the same on their trade? Remember, you’ll have to fix it up, put your name on it and resell it to someone else with all the tenacity you would a brand-new car. So make sure you buy it right … because the profit is made when you buy it, not when you sell it!

∙ To that end, management should be ready and willing to leave the desk and do thorough walk-arounds on each trade to ensure the best outcome for the dealership.

The Cure for Low Gross Profits
If you are like a lot of dealers these days, you could use some good news. Here it is: while you may not have the capability to achieve profit margins similar to those you enjoyed during the pandemic, they could likely be improved. JKR’s clients enjoy the benefit of attracting not only more customers, but better ones, too!

If meeting and exceeding your sales goals (and increasing gross profits at the same time) sounds great to you, you need to call us. Don’t settle for reduced gross profits when help is out there to get you closer to where you’d like to be.

Want to know how we do it? Reach out to Senior Partner Richard Brauns (407) 701-4233 or Partner/Vice President Jon Albert (407) 718-2494 today.

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