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AUTOMOTIVE ADVERTISING & MARKETING

Three Ways

The Three Ways to Increase Your Sales

There are three ways to increase your bottom line. It doesn’t matter if you sell cars, groceries or kitchen appliances, these three precepts still apply. Obviously, how one accomplishes these steps might be a little different for a car dealer than, say, a grocer or appliance salesman; but at their core, the general premise is […]

Frustrated Dealer

What’s the Cure for Frustrated Dealer Syndrome?

Many automotive dealers suffer from Frustrated Dealer Syndrome. No, it isn’t a real medical condition (and truth be told, we came up with name ourselves), but some dealers probably can relate to this and would tell you it does feel like a real issue. What is it? Well, there often isn’t enough time in the […]

More Enthusiastic

Be More Enthusiastic, and Your Employees Will Follow

You can’t just walk up to an employee and tell them they need to be more enthusiastic about their job – and then expect it to immediately happen. In order for them to be enthused, they need a reason – specifically, something that inspires them to be that way. In a lot of dealerships, […]

Pros and Cons

Pros and Cons of Super Bowl Advertising

The folks at Media Life magazine recently published an interesting article on the pros and cons of advertising during the Super Bowl. In addition to Hyundai and Kia, who announced their intention to advertise during the big game almost immediately, Mini, Acura and Honda have also thrown their hats into the ring. Did they make […]

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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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