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AUTOMOTIVE ADVERTISING & MARKETING

Don

Do Not Deviate From Advertising When Things are Unusual

Even when it seems like the proverbial deck is stacked against you because of what’s happening at your dealership, do not deviate from advertising. Why? For example’s sake, let’s take a closer look at the real-life experience of a West Coast-based JKR client. When you read about their story, you would think they’d have every […]

Brand Identity in Automotive Advertising is Priority One

When advertising an ad campaign in the automotive world, brand identity is what’s most important. What do we mean by that? Let’s use the Kia Soul as a rather extreme example. Kia has associated the Soul with the “Hamstars.” You know the creatures we’re talking about; those hip, dancing rodents that have appeared on any […]

Advertising and Marketing

Why JKR Does Advertising and Marketing Best

There’s no substitute for experience, especially when it comes to automotive advertising and marketing. One of JKR’s major strengths is identifying each client’s individual dealership variables that make them unique in their particular media market. But at the same time, a certain amount of what we do for our clients is based on several key […]

Jeremy Chandler

Better By Design: JKR Hires Jeremy Chandler and Abie Silva

To meet and exceed the needs of JKR’s ever-increasing client roster, our agency has responded in recent months by making a number of key hires. Our two newest graphics department employees, Jeremy Chandler and Abie Silva, are welcome additions to our staff. Jeremy Chandler, Graphics Director: Jeremy came to us from SeaWorld Parks and […]

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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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