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AUTOMOTIVE ADVERTISING & MARKETING

Most Valuable Car Brand is Toyota … Again

This year’s most valuable car brand is the same as last year’s most valuable car brand. It’s none other than Toyota, according to recently released data from marketing consultant Millward Brown Optimor in their “Millward Brown Optimor BrandZ Top 10 Most Valuable Car Brands” list. This is quite an achievement in an industry as fickle […]

Automotive Accessories

Automotive Accessories an Often Untapped Profit Source

Automotive accessories are an often overlooked opportunity for additional profit at car dealerships nationwide. No matter what vehicle brand a dealership sells, there is an incredible variety of accessories from which to choose on today’s new cars. You name it, it’s available … safety items, performance packages, comfort features … these, and a lot more, […]

Chrysler Nine Speed Transmission

Chrysler Nine Speed Transmission Plant Opens in Indiana

A Chrysler nine speed transmission is being built in a new plant in Indiana. After seven years and a couple false starts, Chrysler finally dedicated its new plant, located in Tipton, last week. The 782,000-square-foot facility is something the citizens of Tipton have impatiently waiting for. The plant initially will be the workplace of 204 […]

Advertising Agency

Advertising Agency: Great Resource for Car Dealers

An advertising agency is something that quite often crosses the mind of an automotive dealer who does his own dealership marketing. It could be because fresh ideas are hard to come up with, or perhaps there just isn’t enough time in a day for a typical dealer. Whatever the reason, it’s time for you to […]

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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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