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Automotive Advertising Essentials

Automotive Advertising Essentials: Push and Pull Marketing

Including the automotive advertising essentials is the only way to achieve auto dealer success. As you’re well aware, marketing your dealership is not easy. You must identify your audience, deliver a consistent message, and separate your store from the competition. All the while, the dealership must remain true to its brand. Not so long ago, […]

Google Self Driving Cars

How Do Google Self Driving Cars Work?

The idea of Google Self Driving Cars has been around for quite some time. But the idea got a little closer to reality in May, when Google showed off its latest model – complete with no steering wheel or any other type of driver control. As you might imagine, the idea of this concept has […]

Print Automotive Newsletter

A Print Automotive Newsletter is a Great Relationship Builder

Why is a print automotive newsletter such a good idea? Because automotive dealers would like to have the opportunity to speak to their customers, thanking them for their business and doing everything they can to persuade them to come back again and again. A print automotive newsletter can do just that! JKR Automotive Advertising’s quarterly […]

Kelley Blue Book Reports

Two Kelley Blue Reports Recently Released

Kelley Blue Book reports were coming fast and furious over the weekend, as they released two of them. Because inexpensive doesn’t always mean cool, the first was its “10 Coolest Cars Under $18,000.” The second was a bit more serious, as it detailed the June new-vehicle sales projections. The “10 Coolest Cars Under $18,000” is a […]

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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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