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TV Advertising Wins

TV Advertising Wins the Day, and it’s not Close

TV advertising wins the day when it comes to automotive advertising – and advertising in general. While the Internet is without question an ever-emerging force, there has never been anything quite as effective as an expertly crafted TV commercial for an automotive dealer. Want proof that TV advertising wins? A recent report prepared by PricewaterhouseCoopers […]

Last Oldsmobile

The last Oldsmobile Was Made 10 Years Ago Today

The last Oldsmobile drove off the production line 10 years ago today. The final dark cherry Alero marked the end of a brand that had been around since 1897, when Ransom E. Olds founded the Olds Motor Company. The design of many of the last Oldsmobiles were not especially eye-catching when compared to models made […]

Toyota Relocation

Toyota Relocation from California to Texas Coming Soon

A Toyota relocation announcement could come any day. Many major media outlets say Toyota is set to move significant portions of its U.S. operations from their current location of Torrance, CA to suburban Dallas. Toyota employees are expected to be made aware of the move today. This announcement is a major blow to California, currently […]

Automotive Advertising Budget

An Automotive Advertising Budget is Only Part of the Story

When it comes to an automotive advertising budget, many people think the proverbial corporate Golden Rule is in effect; he who has the most gold makes the rules. In this case, it would mean the automotive dealer who has the most dollars to spend will have the most impact with his or her advertising. But […]

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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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