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New Managers

Urge New Managers to Constantly Learn

Every now and then, new managers are needed at auto dealerships. Maybe someone left for another opportunity … or a team leader just wasn’t getting the job done and a change was simply necessary. Whatever the case, new managers are instantly on the spot when they take over from their predecessors. When you decide […]

It is Personal

Why Radio Advertising? Because it is Personal.

This time, it is personal! What are we talking about? Radio advertising, of course. Many experts refer to local radio as the original form of social media, the first way live interaction was established between people not in the same room. All these years later radio still flourishes, and advertisers still trust it to provide […]

Detroit Auto Show

2016 Detroit Auto Show Highlights

The Detroit Auto Show, also known as the North American International Auto Show, is held each year at the Cobo Center in Detroit. The first Detroit Auto Show was organized in 1899. In 1907 it became an annual event, pausing only for the years of 1941-1953. As always, this year’s festivities gave automakers the chance […]

Driving Simulator

Ford Shows Off Impaired Driving Simulator

Through the use of an impaired driving simulator, Ford has found an interesting way to hammer home an important point – how difficult it really is to operate a motor vehicle while under the influence. The company is showing off the technology, called Ford Driving Skills for Life, at this week’s Detroit International Auto Show. […]

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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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