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AUTOMOTIVE ADVERTISING & MARKETING

What Customers are Thinking when Looking for a Car

What Customers are Thinking when Looking for a Car

If you’ve always wondered what your customers are thinking but don’t have any definitive answers, a recent Edmunds “Car Shopping Trends” survey is an interesting place to start. What’s on their minds before and during the purchase process? The report polled 500 in-market car shoppers across the United States and here are the highlights. […]

Parody Ad Nets JKR Advertising & Marketing 2019 Telly Award

Parody Ad Nets JKR Advertising & Marketing 2019 Telly Award

JKR Advertising & Marketing has won a 2019 Telly Award in the Local TV & Local Cable category for its parody advertisement “Painting with Rob”. The ad was exceptionally popular with JKR’s clients, airing in numerous media markets throughout the country. This is the fourth consecutive year the agency has won a Telly Award. […]

Key Questions Every Struggling Dealer Should Ask

Key Questions Every Struggling Dealer Should Ask

If your dealership isn’t performing at the level you expect, it’s time to look in the mirror and ask yourself some difficult key questions – ones just like the eight listed below. If you do not have a satisfactory answer for each of them, it may very well be time for you to contact us. […]

What to Make of the Recent SAAR Reports

What to Make of the Recent SAAR Reports

Recent SAAR reports indicate this year’s brutal 2019 winter brought sales numbers down a bit from initial projections. This has prompted some dealers to begin re-evaluating their advertising plans for the rest of the year. One school of thought has dealers contemplating major advertising cutbacks. But the savvy, experienced dealers realize there are still […]

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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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