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Don’t Worry if Your Ads Offend Someone

Don’t Worry if Your Ads Offend Someone

When choosing the style of ad you want to air in support of your dealership, resist the temptation to worry that you might inadvertently offend someone every now and again. Why? First, your advertisements are created to motivate consumers to purchase a vehicle or service from you, and to do that you must create emotion […]

Getting Better at CSI Surveys

Getting Better at CSI Surveys

Like them or not, CSI surveys are not going away anytime soon. Part of the reason for this is, quite frankly, because no one has come up with a better idea. No one disputes that a customer having a positive experience at a dealership should be everyone’s ultimate goal – and this experience is critical […]

Women in Automotive Conference Gets Rave Reviews

Women in Automotive Conference Gets Rave Reviews

Two of the sponsors for the annual Women in Automotive Conference are JKR Advertising and its sister company, NOW Digital. A number of employees from each company were on hand to take part in the most recent event, held June 24-26 at the Omni Resort in ChampionsGate, FL, located just outside Orlando. Because women […]

Traits of Good Salespeople

Traits of Good Salespeople

Good salespeople are worth their weight in gold! Why? There are about 30 automotive brands available to a car buyer today. Within each brand are several models. And within your market there may even be another dealership offering the exact same ones as you. That’s a lot of options – and a great deal to […]

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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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