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Kia Optima Hybrid

Kia Optima Hybrid: New 2014 Model Charges Ahead

Late last fall, the 2014 Kia Optima gas-powered sedan made its US debut. It featured a complete facelift and its virtues made the world stand up and take notice. So when word spread that the 2014 Kia Optima Hybrid would make its debut at this year’s Chicago Auto Show auto experts were excited. JKR Advertising and its […]

New Car Lease

New Car Lease Turn-Ins are Changing the Used Car Market

Auto dealers love a good new car lease, for more than one reason. First, when they lease a new car to a customer, they know exactly when the customer will be turning it in. Second, because the customer must return the leased vehicle to the dealership and presumably needs another car, the dealer now has […]

Radio Advertising History

Radio Advertising History: Where Was the First Radio Spot?

One person’s version of radio advertising history may be quite different than another’s – at least when it comes to when the very first radio advertisement aired. There are no fewer than five different scenarios that have some validity. We at JKR Advertising & Marketing can’t say for sure which should be deemed the first, […]

Aloha Kia Automotive

Aloha Kia Automotive Dealer Signs with JKR Advertising & Marketing

There’s a new Kia dealer in the JKR Advertising & Marketing fold. We are pleased to announce we’ve partnered with the Hawaii-based Aloha Auto Group, Ltd. to be the agency of record for their multiple Aloha Kia automotive dealership locations. The group features seven Kia stores, which can be found in Honolulu (Airport); Waipahu (Leeward); […]

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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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