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Cure for Average

The Cure for Average: JKR Advertising & Marketing

Are you looking for the cure for average? Do you find yourself looking around your market to make sure you’re doing what the other guys are doing, and trying to look and sound just like the other guys? Over a period of time, you begin to feel like a sheep … just following along with […]

Black Boxes

Automobile Black Boxes Could be Getting Smarter Soon

Black boxes in airplanes are instrumental in determining the cause of aircraft accidents. For this reason, they must be withstand high temperatures and extreme impact. Typically, they contain a flight data recorder and a cockpit voice recorder. After an aircraft accident, the Federal Aviation Administration collects data from the black box to help make their […]

Electric Vehicle Range

Electric Vehicle Range Varies Greatly in Adverse Weather Conditions

Electric vehicle range can vary greatly due to a number of factors, most notably the weather. While a recent Los Angeles Times article claims electric vehicle (EV) production will be up 67% in 2014 globally when compared to 2013, owners of these vehicles should know both their attributes and limitations. The AAA Automotive Research Center […]

2015 Kia Sedona

2015 Kia Sedona: The Minivan is Redefined

The 2015 Kia Sedona made its long-awaited debut recently in New York at the 2014 New York International Auto Show. It’s the final chapter of a complete Kia model makeover led by Peter Shreyer, Kia’s Chief Design Officer. While it is still meant to compete with the likes of the Toyota Sienna, Dodge Caravan and […]

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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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