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Guerilla Automotive Advertising

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Comic spokes-caveman for Hatfield Kia, [tooltip title=”” content=”Sonic Automotive Dealer (SAH NYSE) is a Fortune 500 company and is one of the largest automotive retailers in the United States. Sonic Automotive operates over 100 dealerships in 15 states and 26 major metropolitan areas. Sonic sells over 30 different makes with an emphasis on luxury and […]

Congressman Mike Kelley Tells Off Congress

Congressman Mike Kelly Discusses Automotive Industry

Every so often one comes across an individual that makes one take notice. The honorable Mike Kelly (Congressman, (R) 3rdPA) is one of them. Plain spoken, not one to mince words, Mike Kelly is a voice of both reason and passion. One might not agree with everything he says, but if you are an auto maker, […]

Auto Advertising by Yourself

Do Great Auto Advertising All By Yourself

During an auto advertising conversation between the decision maker and an account executive who was trying to set up an appointment to make a presentation, the auto dealer said, “I do great! I do the advertising all by myself, why would I ever need you? It’s easy!” You know, automotive advertising can be very easy! […]

Automotive Marketing Tip

Automotive Marketing Tip: If You’re Going to Promote, Promote Big

JKR client, Columbus Kia Autosport, [Georgia] wanted to do something significant and newsworthy to celebrate and promote their new location. In addition to special pricing and deals they gave away $1000 a day for forty-five days for a total of $45,000. In addition to paid advertising, the event was also given consideration as a news […]

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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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