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AUTOMOTIVE ADVERTISING & MARKETING

Auto Shopping Experience

Today’s Auto Shopping Experience is Different

The auto shopping experience of today is dramatically different from the way it was one decade ago. How so? The car shopper in 2016 visits less than two dealerships prior to purchasing their vehicle; whereas 10 years ago, they would visit an average of five stores. Further, today’s shopper takes more than a month […]

Tara Wally

Meet our Newest Client Services Department Hires

JKR Automotive Advertising continues to grow, necessitating additions to our Client Services Department over the past year. Today’s blog profiles our newest employees in that department. Tara Wally: Tara is in just her sixth month at JKR but has already proven to be a skillful negotiator, putting together the most cost-conscious buys available for […]

Commercial Elements

Great Commercial Elements Make Ad Campaigns Successful

An automobile dealership’s advertisement will be most successful when it contains all the great commercial elements. Today, we’re not talking about the media buy (think: reach and frequency) which is every bit as important; we’re just focusing on the advertisement itself. So, what are some of these great commercial elements? The ad must stay […]

Traditional Media

Traditional Media Still the Preferred Choice of Many Dealers

Traditional media (radio, TV, direct mail and newspaper) still commands a place of authority in the automotive advertising world. While many dealers are investing big dollars into online advertising, there are others who continue to place the lion’s share of their budgets in the tried-and-true traditional media, according to this article in Automotive News. […]

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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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