AUTOMOTIVE ADVERTISING & MARKETING

Dealer Profits

Dealer profits mostly increase during March. Did yours?

JKRAdvertising / Auto Industry in the News /

April 3, 2014

Dealer profits per new-car sale were better in March than in February. According to industry expert ALG, Inc., incentives rose to $2,773 for the average vehicle in March. This was the highest number seen since 2010, and this figure is a $71 increase from February.

Despite this large number, final February numbers also show the average auto transaction price increased by more than $350. According to Larry Dominique, President of ALG, this can only mean that dealers managed to hold onto more profits in March than they did in the previous month.

Dealer Profits by Brand

Let’s take a closer look at how some of the individual brands fared during March:

Incentives Transaction Price

Feb. vs. March Feb. vs. March

Chrysler (Chrysler, Dodge, Jeep, Ram, Fiat) up 3.1% up 4.3%

Ford (Ford, Lincoln) up 2.4% down 2.8%

General Motors (Buick, Cadillac, Chevrolet, GMC) up 5.8% up 2.1%

Honda (Acura, Honda) up 3.6% up 6.7%

Hyundai/Kia (Hyundai, Kia) up 1.9% up 4.0%

Nissan (Nissan, Infiniti) up 3.7% down 2.8%

Toyota (Lexus, Scion, Toyota) up 3.4% up 3.3%

Volkswagen (Audi, Porsche, Volkswagen) up 2.5% down 5.5%

(Source: TrueCar)

While these numbers show most auto manufacturers did well in February, we know that this isn’t the case for everyone. Many dealers feel the need to accept a lesser profit margin in order to make their sales numbers grow. Some chalk it up to more informed consumers and resign themselves to the fact that their numbers will never be what they used to be. Others still can’t seem to put their fingers on why their dealer profits are shrinking. If your dealership falls into any of these categories, you need to call JKR Automotive Advertising today!

JKR Automotive Advertising: Help is Here

You shouldn’t settle for less. We can help you get your profit margins up without negatively affecting the number of sales. There are a number of factors that ultimately determine dealer profits, many of which you’re not considering. We’ll show you what they are, and get you on the right path to success. Take the time to make one simple phone call that will change the direction of your dealership almost overnight. Get the wheels in motion today by calling (321) 397-0777 or filling out the form on this page.

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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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