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Vehicle Recalls

Vehicle Recalls Present Opportunity to Shine at Dealer Level

Vehicle recalls are coming in at a fast and furious rate. Prior to a recent announcement of five concurrent Toyota recalls totaling 6.4 million vehicles, a recent Los Angeles Times article pointed out that about 11 million vehicles had been recalled in the United States so far this year. Your first thought very well could […]

Long Auto Loans

Will Long Auto Loans Have Long-Term Impact on Auto Industry?

Long auto loans are becoming the norm, but so far this does not seem to be a chief concern among automotive dealers. Despite personal incomes not going up much, the average transaction price for a vehicle is rising (typical amount financed is an all-time high of $27,612) … and sales volume is going up, too. […]

Automotive Advertising Experience

Your Agency Must Have Automotive Advertising Experience

Automotive advertising experience makes all the difference in the world, and no one can convince me otherwise. It always makes me shake my head when I read articles that say something to the effect of, “Experience doesn’t matter. Sometimes, that’s how an automotive dealer can get a new and innovative idea.” Experience doesn’t matter. Really? […]

Kia Mexico Plant

A New Kia Mexico Plant? Sources Say it’s Going to Happen

A recent Automotive News article says a new Kia Mexico plant is in the works. The article sites two “in-the-know” sources who say the automaker is set to break ground on a new assembly plant in Monterrey in the near future. This comes as a mild surprise to some. Approximately two years ago, Hyundai-Kia Chariman […]

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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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