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Rolling Stone: Radio Still Matters … a LOT

Rolling Stone: Radio Still Matters … a LOT

In a recent article found on Rolling Stone‘s Website entitled “Rap’s New Generation Took Over, Rock Ruled the Road and Radio Still Mattered”, the iconic publication discussed many of the current music trends of 2018. In the section discussing radio, it says the following: 228.5 million Americans still turn on a radio each week, far […]

More Discontinued Cars: Sedans Continue to Disappear

More Discontinued Cars: Sedans Continue to Disappear

It’s time to announce more discontinued cars and say goodbye to another cluster of vehicles that won’t live to see the 2020 model year. Once again, the vast majority of them are sedans, as SUVs and crossovers are what most customers want these days. Buick Lacrosse: Plans were already in place for a redesign […]

JKR Employees Donate 106 Toys to Baby DJ Fund

JKR Employees Donate 106 Toys to Baby DJ Fund

JKR Advertising & Marketing has again donated more than 100 toys to the Baby DJ Christmas Fund, which provides toys, food and resources to kids and their families each holiday season. This year, a total of 106 toys were delivered to Orlando radio station XL 106.7’s toy warehouse. “It is our pleasure to support the […]

Your Customers are not Just Like You

Your Customers are not Just Like You

Your customers are not necessarily just like you … but unfortunately, many dealers don’t think about that when they advertise. The truth is, quite often your customers are radically different from you in many ways. If this is the case, there’s a very good likelihood that they’ll have a much different wish list than you might […]

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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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