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Dealer Profits

Dealer profits mostly increase during March. Did yours?

Dealer profits per new-car sale were better in March than in February. According to industry expert ALG, Inc., incentives rose to $2,773 for the average vehicle in March. This was the highest number seen since 2010, and this figure is a $71 increase from February. Despite this large number, final February numbers also show the […]

Suntrup Hyundai

Suntrup Hyundai South County is King of Central Region

Suntrup Hyundai South County recently received some exceptionally good news. The final March statistics are out, and Suntrup Hyundai South County is atop the entire Central Region for the month in total new Hyundai sales and Certified Pre-Owned Hyundai Sales. This is no small feat when you consider this is a region that includes six […]

Automotive Advertising Unfair Advantage

JKR: The Automotive Advertising Unfair Advantage

JKR is the automotive advertising unfair advantage. One of our newest clients, Taylor Kia of Boardman (OH) is a classic example of what can happen when a client makes the switch to JKR. March is not yet even complete at the time this is being written, and already Taylor Kia of Boardman is enjoying the […]

2014 Kia Forte Koup

Experts Say 2014 Kia Forte Koup is Best Value in America

The 2014 Kia Forte Koup has been given the distinction of being a “Best Value in America.” The sporty two-door Kia captured the award in the Compact Coupe segment, according to the leading industry authority on vehicle ownership costs. Honoring the 2014 Forte Koup is Vincentric, the well-respected automotive data firm headed by President David […]

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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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