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Iconic Cars

The Most Iconic Cars of TV and Movies

In honor of the popularity of this week’s blog highlighting the original Batmobile, today’s entry focuses on some of the most iconic cars television and the big screen have ever seen. Have you ever wondered the make, year and model of any of TV and movies’ most famous automobiles? Here are the answers to a […]

Recruiting

Recruiting the Right Salespeople Creates a Lasting Impact

Do you believe in recruiting salespeople, or do you hire them the old-fashioned way – through in-person applications? We hope you believe in the value of recruiting, because it can make a huge difference in a number of ways. You are well aware of exactly what qualities you want from each member of your […]

Original Batmobile

For Sale: The Original Batmobile

Holy sticker shock, Batman; the original Batmobile is for sale! You remember it, don’t you; that uniquely shaped, shiny black car with the neon orange stripes? Driven by the original Batman, Adam West, in the popular superhero show that ran from 1966-1968, the car has received its fair share of fanfare – and its legend […]

Independent Repair Shops

Don’t Let Independent Repair Shops Take Your Service Business

Are independent repair shops stealing a big chunk of your service business? If you’re like most dealers, the answer is an emphatic yes. According to this article just released by Ward’s Auto, third-party independent repair shops are pirating about 75% of service business from the dealerships where the customers purchase their cars. We don’t have […]

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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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