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NHTSA Chief Administrator

New NHTSA Chief Administrator to be Named Soon

A new NHTSA Chief Administrator will be named very soon. The National Highway Traffic Safety Administration has been operating with Deputy Administrator David Friedman at the helm since January, when David Strickland resigned to take a position with a Washington-based law firm. Anthony Foxx is the U.S. Transportation Secretary, and he is in charge of […]

Kia Soul EV

Initial Kia Soul EV Price Set at $33,700

The all-new 2015 Kia Soul EV price is about what you might expect. It will begin with a sticker price of $33,700, plus an $875 destination fee. However, there is a $7,500 federal tax credit that drops the final price to under $30,000. Debuting in October, the Kia Soul EV will primarily be available in […]

AMG GT

Mercedes-Benz AMG GT is Coming to Compete with Porsche 911

The Mercedes-Benz AMG GT sports car is coming soon. It appears that Mercedes-Benz is ready to throw its hat in the ring in the two-seater sports car arena, and the AMG GT is poised to compete against the likes of the Porsche 911, the Audi R8, Nissan GT-R and the Acura NSX. While it won’t […]

Automotive Manufacturers

Automotive Manufacturers Increase Ad Spending in 2013

Automotive manufacturers continue to understand they can’t afford to refrain from advertising. Last year was proof positive, as the auto industry as a whole increased spending nearly four percent from 2012 – at a total of $15.2 billion. This total represents the second-largest industry number in 2013. Only retail, at $16 billion, topped the retail […]

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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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