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Inspire Your Employees

Do You Inspire Your Employees?

Do you actively seek out ways to inspire your employees? If you don’t, you should start doing just that … as soon as possible. Think about it: as a dealer, you can’t just tell a person to be inspired and enthusiastic about their job and expect it to instantly happen. They need to be inspired […]

ASCI Report

ASCI Report Shows Downturn in Overall Scores

The American Customer Satisfaction Index Report (ASCI Report) is an independent national benchmark of customer satisfaction with the quality of products and services available to household consumers in the United States. Each year, an ASCI Report is published, focusing on automobiles and light trucks. Scores are based on customer evaluations of recently purchased automobiles from […]

Gross Profits

Dealer Gross Profits are Down – But They Don’t Have to Be

Why are auto dealers’ gross profits down in the second quarter of this year when compared to the previous three months? According to a recent article in Automotive News, it depends on who you ask. Some believe that it’s due to competition (including the mass-produced import brands), while others might say it’s because of low gas […]

Women in Automotive

JKR Employees Attend Women in Automotive Conference

Several employees from JKR and sister company NOW Digital attended this week’s inaugural Women in Automotive Conference. Held at the Ballroom at Church Street in downtown Orlando, the conference included speakers, breakout sessions, workshops and booth displays. More than 300 professionals from across the country made the trip to the Sunshine State to attend the […]

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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.

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