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Mark Fields

Ford Reportedly Set to Name Mark Fields CEO

Ford Motor Company COO Mark Fields may soon become Ford CEO Mark Fields. That’s because beloved current CEO Alan Mulally is rumored to be retiring before year’s end, and Fields is said to be the pick to replace him. Mulally has been CEO of Ford since replacing Bill Ford in 2006, leaving Boeing to take the […]

New York Auto Show

The 2014 New York Auto Show Starts This Week

The 2014 New York Auto Show begins this week. Automobile dealers (including JKR clients), enthusiasts and media members everywhere will have their eyes on the Big Apple to see the latest and greatest creations by the world’s finest automakers. The New York Auto Show opens to the media on Wednesday, April 16. The following day, there […]

Radio Marketing Study

Radio Marketing Study Supports Advertising on the Airwaves

A recent radio marketing study published in Advertising Age yielded some interesting, eye-opening results. Sponsored by Clear Channel, the study comes from Nielsen Catalina Solutions, and combines data from Nielsen’s audience measurement company with Catalina’s shopper-card figures. Despite the major inroads into advertising made by the Internet, radio won the day. The data demonstrated a […]

Record High Fuel Economy

Record High Fuel Economy in March is Just the Beginning

Record high fuel economy was reached in March. New vehicles sold during the month averaged 25.4 miles per gallon, the highest number ever recorded. The numbers were furnished by the University of Michigan’s Transportation Research Institute. Last year, a Consumer Federation of America study revealed that consumer demand for fuel-efficient vehicles is higher than ever, […]

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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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