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AUTOMOTIVE ADVERTISING & MARKETING

Key Ingredients of an Automotive Spot, Part I: Should it Be Funny or Serious?

Key Ingredients of an Automotive Spot, Part I: Should it Be Funny or Serious?

Automotive adverting can be found almost anywhere. You hear ads on the radio and see them on TV, online and even on billboards. The goal, of course, is to leave a lasting, positive impression upon the audience so they want to know more about your store and its vehicles/services. To do that, many decisions must […]

Traditional Advertising Still Wins the Day; Here’s Why.

Traditional Advertising Still Wins the Day; Here’s Why.

As an auto dealer, you have important products and services the people in your community need. But that by itself isn’t enough to make you successful; you have to let them know you’re there to satisfy those needs and persuade them to visit your dealership. That’s where advertising comes in, and the automotive advertising channels […]

Don’t Get Stuck in These Web Entanglements!

Don’t Get Stuck in These Web Entanglements!

An automobile dealer’s Web site is an extension of their physical dealership facility and, as such, should not be viewed as any less important than other parts of your overall automotive advertising arsenal. Your website should be user-friendly and easy to navigate, allowing customers to quickly find the information they seek. It should also showcase […]

Has Post-COVID Automotive Advertising Changed for Good? Yes and No.

Has Post-COVID Automotive Advertising Changed for Good? Yes and No.

When the COVID period is looked back upon in the future, it will be remembered as one of the craziest times in automotive advertising history. On one hand, computer chip shortages and supply chain issues made it difficult for dealerships to get new inventory. On the other hand, however, people were lining up to buy […]

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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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