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AUTOMOTIVE ADVERTISING & MARKETING

Commercial Length

Discussing Commercial Length … at Length

What commercial length is the best for an auto dealership? The media world of today can support ads of multiple durations … but at the end of the day, whatever you choose should be something that leaves a lasting impression upon your audience. Thus, the answer to the commercial length question is simply, “As long […]

Look in the Mirror

Look in the Mirror. What do You See?

It isn’t always easy to look in the mirror and view what’s staring back at you, personally or professionally. But as an automobile dealer, it is beneficial to take an honest look at your dealership from the viewpoint of others. When you do this, you may discover something you never noticed before that requires some […]

Traditional and Internet Advertising

Traditional and Internet Advertising are the Perfect Tandem

Traditional Advertising and Internet advertising can be a wonderful combination. Radio and TV automotive advertisements are proven over many decades to help auto dealers sell cars; no one can dispute that. The increased sales and foot traffic a dealer gets as a direct result of their efforts have a profoundly positive effect on a dealership’s […]

Your Niche

Have You Found Your Niche?

When you are able to discover your niche in business – automotive dealerships included – you have achieved a major milestone toward success. As you find your niche – one that will be of interest to people who will buy cars from you – a monumental discovery is being made, and you’ll differentiate yourself from […]

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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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