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AUTOMOTIVE ADVERTISING & MARKETING

What Your Customers Want

What Your Customers Want in a New Car

Do you know what your customers want in a new vehicle? A recent Forbes article detailed AutoPacific’s research on this very topic. While safety features are moving up the list, it’s still the simple comfort items that win the day. Here’s What Your Customers Want Power Driver’s Seat: 79% Heated Front Seats: 70% Active Blind-Spot […]

Insideradio

Insideradio.com: Radio Tells Story, Creates Urgency

According to two recent articles released by Insideradio.com, radio automotive advertising has a definite knack of steering potential customers into dealership showrooms all across the country. These ads cause a favorable reaction among the nearly 85% of potential car shoppers who hear hem prior to visiting automotive showrooms during the always-critical Friday-Sunday time period that […]

Suntrup Sales

Suntrup Sales Soar in St. Louis

Suntrup sales are soaring! This longtime St. Louis-based JKR client is experiencing a year for the record books in every store; and with each of its four automotive brands. “The number of milestones the Suntrup group has eclipsed in 2015 has been monumental,” said Richard Brauns, Senior Partner at JKR and Account Executive for the […]

Good News in October

Mostly Good News in October

There was mostly good news in October for the major automotive brands. New-car sales in the United States increased by 13.6% year-over-year in October, with a total of 1.46 million vehicles sold during the month. In addition, Kelley Blue Book is reporting that the estimated average new-car transaction price for light vehicles during October […]

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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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