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How We Grow Our Advertising Agency

Several weeks ago in Ad Age Daily an article discussing “how we grow our advertising agency” caught my eye. The article discussed was how ad agencies were so inept at selling their own services. The attendant blog generated much breast-beating, mea-culpas, parsing and parting: What is selling? The different kinds of selling consultative, relationship/partnering, hard […]

Let Me Introduce Measurable Results for April 2011

Of nearly 100 clients we have 68 auto dealers of the same brand spread from coast-to-coast this amounts to approximately 8.5% of all that brand’s franchisees in the country. And to spare the reader the boring details, the bottom line is when compared to their fellow franchisees, our clients averaged 75 new units per month, […]

JKR Advertising Signs 2 New Auto Clients

JKR is now agency of record for University Kia in Bloomington Indiana and Kia of Conyers in Conyers, Georgia. Account Executive Rick Johnson will manage the accounts, I believe it is a terrific time for auto retail, the difficulties of the past few years have increased focus and imposed greater discipline on the way business […]

Boniface Hiers Automotive Group

Boniface Hiers Kia Turns in Outstanding Performance in February 2011

Melbourne, Florida. JKR client A. J. Hiers, owner, announced that February 2011 saw triple a digit increase in sales compared to the same period in 2010. The economy seems to be picking up, and that coupled with an aggressive radio campaign is reaping big benefits for us, he said. Last year in February, Boniface-Hiers sold […]

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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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