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Smart Cars to be All Electric Starting in April

JKRAdvertising / Uncategorized /

February 16, 2017

smart Daimler has informed its Smart dealers in the United States and Canada that, starting in April, it will no longer produce gasoline-powered vehicles. Instead, Smart will focus completely – instead focusing completely on its all-electric version of the two-seat Fortwo model. Once the last remaining gas-powered models are sold, Smart will limit North American sales to the battery-powered Smart Fortwo Electric Drive.

Primarily known for its upscale Mercedes-Benz vehicles, Daimler introduced the Smart brand in 1994. It took a decade to reach North America, arriving in Canada in 2004. In 2008 it made its debut in the United States to rave reviews. Over time, however, the novelty of driving an ultra-small car wore off, fuel prices dipped and demand for the Smart brand plummeted. Its first-year sales number of 24,000 was never attained again.

Is This a Smart Move? You Decide.

Smart took one last swing for the fences with their 2016 model, hoping a complete redesign of the Fortwo (its first total makeover since the 1990s) would help bring about an increase in sales. While they did, indeed, sell more cars in Europe, it made no difference here in America as the Fortwo saw another 15-percent dip from the 2015 numbers … to just 6,211 cars sold nationwide.

When you take everything into consideration, this decision can’t be completely surprising. It comes during a time when there does seem to be a keen interest in battery-powered automobiles – and it is yet another in a series of setbacks for small gas-powered cars in general, a category that has suffered of late.

But if this change is not successful, one has to wonder about the brand’s long-term future in North America.

JKR Automotive Advertising: We Move Cars.

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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.

JKR Automotive Advertising: We Move Cars.

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