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AUTOMOTIVE ADVERTISING & MARKETING

Your Inventory: It’s All About the Presentation

Your Inventory: It’s All About the Presentation

Why is having the right inventory so important to an automobile dealer’s success? Simply put, your inventory isn’t of any value to you unless it is in a constant state of motion … and it is vital that you always have not only the right number of cars – but the right mix of cars, […]

JKR Achieves Highest Number of Clients in its History

JKR Advertising & Marketing, the Orlando-based automotive advertising giant, recently celebrated a monumental agency milestone. The company ended 2017’s Third Quarter with its largest number of clients in company history, as they recently eclipsed the 120 mark through the addition of several new clients. “We are very excited to have reached this milestone. It […]

An Explanation of Our Company Name

An Explanation of Our Company Name

Over the years, we have been frequently asked why our company name includes both “advertising” and “marketing”. There are a lot of people who believe these terms are virtually interchangeable, while others get them confused with one another. This blog gives an explanation of each of these two all-important words and discusses how they […]

Regaining Lost Service Customers

Regaining Lost Service Customers

A very large percentage of service customers from just about every dealership selling new cars will ultimately take their business to independent repair facilities. This is a very rampant issue among new-car dealers, regardless of the city or state in which your dealership resides. There is seemingly a “corner garage” on every corner these days […]

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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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