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AUTOMOTIVE ADVERTISING & MARKETING

Silent Majority

The Silent Majority Rules

You must satisfy the silent majority! After you count the 5% of people who will be your strongest advocates no matter what, and the 5% you just can’t satisfy regardless of what you do, what’s left is the silent majority of 90%. The first 10% are the most vocal; typically, these people go online and […]

Mystery Shopper

What Would a Mystery Shopper Say About Your Store?

In recognition of the release of the ninth-annual Pied Piper Prospect Satisfaction Index (PSI) study, which measures the responsiveness of more than 6,000 dealers using data from mystery shoppers, we ask you this: What if a mystery shopper filed a report on your dealership and its employees? What do you think it might say? Of course, the […]

Win the Heart

Why You Should Win the Heart of the Customer

Renowned advertising expert Roy H. Williams often uses the phrase, Win the Heart and the Mind Will Follow. It’s no wonder Mr. Williams has been so successful; this is absolutely true, and something we always remember anytime we produce our creative offerings at JKR Automotive Advertising. How to Ensure You Win the Heart Too many […]

TV Automotive Advertising Works

TV Automotive Advertising Works. Ask Our Clients.

TV Automotive Advertising works wonders because it gives car dealers the opportunity to quickly get their message out to large groups of people. Dealers enjoy seeing their commercials on television, knowing that they pack a big punch by saturating their market in the most effective way possible. WHY TV AUTOMOTIVE ADVERTISING WORKS Nielsen Research […]

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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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