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Used Car Sales

Used Car Sales Continue Rising among Franchised Dealers

Used car sales are an especially hot topic among automotive dealers. More than ever before, franchised auto dealers are realizing they should be putting a special emphasis on this market. With this change in focus comes a predictable change in sales numbers, too. The 2014 Used Car Market report, put out by Manheim, shows that […]

Automotive TV Spot

A Great Automotive TV Spot: If They See It, They Will Come

A great automotive TV spot is still the unquestioned king of all automotive advertisements. It touches the most people in the shortest amount of time. A skilled advertising agency like JKR Advertising & Marketing can help ensure it is seen by the right audience. It brings all senses into play with the combination of sight, […]

Oil Change

Why a “Cheap” Oil Change Isn’t Cheap at All

It’s always a great idea to get routine maintenance services performed on your vehicle as recommended by its owner’s manual, such as an oil change. This is perhaps the single-most important thing you can do to extend the life of your vehicle. It’s often the first instinct to take their car to a “quick lube” […]

Radio Advertising Numbers

Radio Advertising Numbers for You to Think About

Nielsen, the National Automotive Dealers Association (NADA) and the Radio Advertising Bureau (RAB) have recently released some interesting radio advertising numbers that are worth looking at closely. (1) Radio reaches 68% of US consumers age 12-plus on any given day. That means nearly 70% of Americans who can make some sort of purchase are listening […]

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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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