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Reputation

Your Reputation is More Important than You Think

It’s important that you maintain an upstanding reputation in your community. Sure, that seems obvious, but a lot of car dealers are so busy conducting business on a day-to-day basis, they don’t have time to worry about such things. But today’s blog is being posted so that dealers everywhere will pause long enough to realize […]

HD Radio

HD Radio Enhances AM/FM Signal

You might say that HD Radio has become AM and FM radio’s proverbial wingman. With the emergence of Pandora and other streaming services, one might think that AM and FM radio could begin to slowly go the way of the dinosaur. But not so fast; a recent Nielsen study has shown that radio is very much alive and […]

Getting Attention

Getting Attention … the Goal of Any Advertiser

Advertisers produce their ads with the hope of getting attention. Through placement on the TV or radio airwaves, on the Internet, in print, on a billboard, or wherever … these advertisements allow a business to be front-and-center in someone’s face as they say, “LOOK AT US! WE’RE HERE! WE WANT YOU TO BUY OUR PRODUCTS […]

The Truth

What Happens When the Truth isn’t Enough?

Sometimes, the truth hurts. Allow us to explain. You might have the best cars on the planet. You might have the best sales staff. You could even have the best service or finance departments. Maybe your dealership facility is the biggest, most attractive building in your city. But even if you have all those things, […]

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Recent Posts

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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