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Josh Gordon

Would You Hire Josh Gordon at Your Dealership?

Josh Gordon is a superstar wide receiver for the National Football League’s Cleveland Browns. In 2013, he led the league with 1,646 receiving yards despite playing in only 14 games, and added nine touchdown receptions. He even became the first receiver in league history to record back-to-back 200-yard games. But there’s another side to Josh […]

Distracted Drivers

Distracted Drivers May Soon be Caught in the Act

If you’re one of the many distracted drivers on the road, read on. General Motors is working on new technology that will expose you! It is an eye-tracking mechanism that will reveal when your eyes are not looking at the road, the rearview mirror or anyplace else upon which you should be focusing. General Motors […]

Suntrup Success

Suntrup Success in August is Unprecedented

The Suntrup success in August was unprecedented. The St. Louis-based Suntrup Automotive Group posted the best numbers in the organization’s history during August, selling a total of 1,010 combined vehicles in all their stores. According to JKR Partner and Suntrup Account Executive Richard Brauns, the Suntrup success is attributed to the combination of customer care […]

Women Buyers

Today, Women Buyers Call the Shots More Often than Men

The role of women buyers has changed over the years. To some degree, there is still a stereotype that women buyers sit back and let their husbands negotiate the final price – as was typically the case years ago. Today, however, much has changed, and there are statistics to back it up! The folks at […]

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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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