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The Truth About Automotive Leads

The truth about automotive leads may surprise you. Do you advertise your vehicles on websites such as Cars.com, CarGurus.com and other sites of that genre? What are your expectations of those websites? Do you expect your automotive Internet leads from these sites to be exclusively yours? Your expectations and what actually happens may be two […]

TV Advertising

TV Advertising Still Offers Big Bang for the Buck

A standout TV Advertising Agency that services automotive dealerships understands the inherent value a good TV ad campaign gives its clients. Auto dealerships enjoy seeing their commercials on television because they know TV ads pack a big punch.

NADA Automotive Advertising Spend

Automotive Advertising – Newspaper’s Loss is Internet’s Gain

Successful, savvy auto dealers understand that a good automotive advertising agency is worth its weight in gold. Effective advertising and marketing campaigns make the difference as local automotive dealers compete to dominate their market(s). Each year automotive advertising budgets rise significantly, as local dealers vie to outsell their competition. Recent data compiled by the National […]

100th Anniversary Dodge Challenger

Dodge 100th Anniversary Special Edition Charger and Challenger

A Dodge 100th Anniversary Special Edition Charger and Challenger have been introduced by Dodge to celebrate its century in business. Early Years of Dodge The early 1900s were the pioneer days of the automotive industry, with many brands struggling to gain acceptance and their own recognizable identity in the marketplace. In 1914 alone, nearly 150 new […]

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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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