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AUTOMOTIVE ADVERTISING & MARKETING

Employee Turnover

Addressing the Employee Turnover Issue

Why is the employee turnover rate at auto dealerships so high when the median weekly salary of a car-dealership employee is nearly 30 percent more than the average earnings of those outside the industry? (Sources: 2013 and 2015 NADA Dealership Workforce Industry Reports.) To get the answer to this all-important question, it’s not a bad […]

Gross Profit Margins

How Dealers Can Combat Low Gross Profit Margins

A big issue confronting auto dealers in recent years is lower gross profit margins on sales of automobiles. Lots of variables come into play, of course, such as the brand(s) sold, the marketplace in a given market and the business acumen (or lack thereof) of the management staff … but almost everyone across the board […]

CSI Study

CSI Study Yields Interesting Results

The experts at JD Power recently released the results of their annual US Customer Service Index Study (CSI Study). It is based on 72,000 owners and lessees of 2011 to 2015 model-year vehicles, and was fielded between October and December 2015. We’ll sum up the results of the CSI Study quickly, because that’s not the goal […]

Telly Award

JKR’s “Deal to Die For” TV Spot Wins Telly Award

JKR Advertising & Marketing has won a 2016 Telly Award in the Local TV & Local Cable category for its Halloween-based television advertisement “Deal to Die For”. The ad was exceptionally popular with JKR’s clients, airing in numerous media markets throughout the country. The 30-second spot, which debuted last October, features spokesperson Meredith Branham […]

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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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