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Words

Don’t Underestimate the Power of Words

Since the days of the first advertisement, the choice of words used (spoken, print, on-screen or otherwise) has made a huge difference in the level of success of the ad. Why? Well, famed ad man Roy H. Williams may have said it best in his book, Secret Formulas of the Wizard of Ads: “Words are […]

Bounties

Automakers Offer Bounties to Expose Online Vulnerabilities

Bounties are being offered to computer hackers who expose security vulnerabilities and report them to auto manufacturers. So far, two companies – Fiat Chrysler Automobiles (FCA) and Tesla have stepped to the plate and offered rewards to anyone willing to use their hacking talents for good instead of for evil … so to speak. […]

Advertise on Radio

It Makes Sense to Advertise on Radio

There are many great reasons why JKR’s clients love to advertise on radio. Today’s blog will review many of them courtesy of the Radio Advertising Bureau (RAB), who published the following report showing that radio is still a force in advertising. Radio reaches almost everybody. Each week, 93% of adults 18-plus are exposed to […]

Psychographics

Psychographics Explain Why Customers Buy Their Cars

Don’t forget psychographics when you advertise! Most folks are aware of what demographics are to some degree – you know, things like gender, age, marital status, number of kids, status of homeownership, income and the like. These are obvious things that must be taken into consideration when advertising – but that’s really only half the […]

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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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