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AUTOMOTIVE ADVERTISING & MARKETING

Orr Kia

Orr Kia, New JKR Client, Experiences Monster July

Orr Kia of Shreveport Bossier, LA is one of JKR Automotive Advertising’s new clients, and we are thrilled to have them as part of our dealership family. We at JKR are pleased to report that Orr Kia (led by new General Manager Josh Knight) has experienced immediate, tremendous growth in their first month as our […]

American New Car Sales

American New Car Sales Soar in July

July saw American new car sales soar across the board. While not all the numbers are in yet for some of the foreign-made brands, it’s apparent that July was a month that reinforces the fact that American consumers continue to demand new cars. American New Car Sales Numbers The US charge was led by Chrysler, […]

Average Vehicle Age

Average Vehicle Age Remains the Same

New average vehicle age information has surfaced. Data compiled at IHS Automotive shows the average age of a light vehicle on the road in the United States was 11.4 years at the end of 2013. This was the same number posted at the end of 2012. In addition, IHS research shows that the total number […]

The U.S. flag flies at the Burt GM auto dealer in Denver

Big SUV Sales Help GM through Tough Times

Big SUV sales slipped dramatically during the recession, to the point where General Motors actually decided to close the doors on two of their three factories that made their large SUV offerings (Janesville, WI and Moraine, OH). During that time, GM shifted some of its focus to smaller, more fuel-conscious vehicles like the Cruze and […]

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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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