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AUTOMOTIVE ADVERTISING & MARKETING

Don’t Underestimate the Value of Your Brand

Your business is only as good as your brand. Regardless of its size, every company — automotive dealerships included – needs a brand, because it goes a long way toward establishing the way your community views you. To be clear, in the case of a car dealership, branding goes well beyond the makes and […]

New Office Headquarters

JKR Purchases New Office Headquarters in Maitland, FL

JKR Automotive Advertising is pleased to announce it has purchased the 291 Southhall Lane building in Maitland, FL to be its new office headquarters. The contemporary two-story structure boasts 24,202 square feet and is located near Interstate 4, just off State Road 414 (Maitland Boulevard). “We have simply outgrown our Downtown Orlando location and had […]

Demise of Scion

What Led to the Demise of Scion?

Last week’s decision by Toyota to discontinue the Scion brand comes as no surprise by many industry experts. During its early days, Scion became a mainstay as a brand appealing to a young, hip audience and at its highest point – its third year of existence – it sold 173,034 new vehicles in 2006. Fast-forward […]

Dominate

Dominate Your Advertising Targets (or Don’t Bother)

When you advertise, be sure to dominate in whatever you’re doing. Doing things half-heartedly is a mistake, and you’ll never get more than lukewarm results when you decide to spread your advertising budget too thin. Here’s why: effective advertising takes both reach and frequency. If you are part of a large dealership or dealer […]

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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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