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AUTOMOTIVE ADVERTISING & MARKETING

What’s Next for Your Dealership?

What’s Next for Your Dealership?

What’s next? That should always be the question you’re asking as you look for ways to make your employees, your facility and ultimately, your sales, better than ever. It’s really easy to sit back and enjoy your current situation – especially when your business is profitable. But if you aren’t looking for new and better […]

Make Sure You’re Advertising to Everyone

Make Sure You’re Advertising to Everyone

Are you advertising to everyone? Many automobile dealers make the mistake of advertising only to those immediately in the market for a vehicle. While this seems logical, there’s a flaw in that strategy: if your advertisements don’t make everyone take notice of them, your store will not be top of mind when the next month’s […]

Tips for Advertising Cars Online

Tips for Advertising Cars Online

When advertising cars online, be sure to pay attention to the little details. Why? They can ultimately make the difference in a visit to your dealership to look at a car versus that visit being made at your competition’s store. So that brings us to the question: What are some of these little details? Correctly […]

JD Power Jumps into F&I Market

JD Power Jumps into F&I Market

Global market research company JD Power has made the jump into the automotive F&I realm. This comes on the heels of last September’s test launch into the market, during which they took on 10 stores. That pilot program ended in December. While some might wonder why the firm would enter the F&I space, 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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