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Women in Automotive Conference Draws Rave Reviews

Women in Automotive Conference Draws Rave Reviews

About 375 people from all walks of the automotive industry descended upon the Orlando Florida area for last week’s Women in Automotive Conference at the Omni Hotel at ChampionsGate. JKR Automotive Advertising is proud to be a continuing sponsor. Entering only its third year, the conference has quickly grown into one of the country’s […]

AdAge Study Reveals Interesting Automotive Stats

AdAge Study Reveals Interesting Automotive Stats

A recent AdAge study took a look at the nation’s companies that spent the most during calendar year 2016. Not surprisingly, the automobile industry had an immense presence in the Top 100; in fact, by this blogger’s count, a full 10 spots were occupied by automobile manufacturers. Who spent the most, you ask? That […]

How Advertising Determines Your Customer Base Size

How Advertising Determines Your Customer Base Size

Do you wish to expand your customer base? Advertising on radio and television makes this happen … as long as it is done properly and with the right mindset. What do we mean by that? The most obvious thing any dealer wants is the immediate response radio and TV advertising can provide, meaning that once […]

Automobile Accessories: A Somewhat Untapped Profit Center

Automobile Accessories: A Somewhat Untapped Profit Center

Automobile accessories are not being offered nearly enough to customers at the dealership level. Late last year we did a blog about this very subject, and this week, Automotive News offered some eye-opening statistics supporting this claim that is worth a quick read. Foresight Research is the company whose research was used by Automotive […]

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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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