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AUTOMOTIVE ADVERTISING & MARKETING

Initial Quality Study

Initial Quality Study Reveals Porsche as Repeat Winner

The 28th annual JD Power and Associates Initial Quality Study results have been released, and last year’s winner is also this year’s champ. That’s right … for the second straight year, Porsche is the top dog in the automotive pack. Following Porsche in the ratings was Jaguar in second place, with Lexus finishing third. On […]

Hybrid Car Savings

Are Hybrid Car Savings Greater Than Initial Extra Expense?

Touting hybrid car savings, the Honda Insight Hybrid was introduced for the first time in 1997 at that year’s Tokyo Auto Show. Two years later, it made its way stateside in the form of a 1999 model that was the very first mass-produced hybrid car sold in America (beating the Toyota Prius by seven months). […]

Vehicle Satisfaction Awards

2014 Vehicle Satisfaction Awards Are Out

The 18th Annual Vehicle Satisfaction Awards have been handed out, and among the big winners are Lincoln and GMC, voted the two highest-rated brands. (Lincoln was tops in the premium category, while GMC took home top honors in the “Popular Brand” category. Meanwhile, the Mercedes-Benz S-Class posted the best overall score. The Vehicle Satisfaction Awards […]

Radio Advertising Audience

Knowing Your Radio Advertising Audience Means Best Results

You must know your radio advertising audience when you design an automotive advertising strategy. If you don’t, it’s a bit like blindfolding yourself before you start throwing darts at a dart board. You may hit your target every once in a while, but most of the time you won’t even come close. The end result […]

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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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