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Discussing Dealership Employee Turnover

Discussing Dealership Employee Turnover

Employee turnover at automobile dealerships is currently running at an almost 40 percent annual clip. Year after year, this number has continued to grow and the issue is especially serious in the sales department. This information comes from a recent Dealership Workforce Study presented by the NADA, the organization representing the interests of dealerships selling […]

Radio Ads Motivate Customers to Visit Your Website

Radio Ads Motivate Customers to Visit Your Website

What’s the best way to get customers to visit your Website? Knowing your audience profile (who they are, where they’re coming from, how much time they spend on each of your Web pages, what devices they’re using to find you, etc.) is half the battle to achieving a successful online advertising campaign. The other […]

Nielsen Study: Return to Normal Coming Soon

Nielsen Study: Return to Normal Coming Soon

A return to normal has slowly begun and will continue gaining momentum in the coming months. This study prepared by Nielsen at the beginning of the month indicates Americans are beginning to see the light at the end of the tunnel. It allowed surveyed individuals to fall into one of the following three categories […]

Why Today’s Customer Experience is More Vital Than Ever

Why Today’s Customer Experience is More Vital Than Ever

The customer experience is obviously very important at all times but right now this is especially true. We recently heard the following from a Mitsubishi dealer: “The bad news was that we only had five customers in our showroom all day last Thursday. The good news was … we sold five cars!” While dealerships […]

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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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