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Oscar Advertising

Oscar Advertising is Expensive; Ours Isn’t!

We recently told you about the prices of advertisements during the Super Bowl, but how about this weekend’s Oscar Advertising? Simply put, it isn’t as bad as the Super Bowl, but they are far from cheap! A 30-second Oscar Advertising television spot will fetch an amazing $1.95 million – a total that is up eight […]

Why Automotive Radio Advertising

Why Automotive Radio Advertising?

Why automotive radio advertising as part of your automotive advertising strategy? Radio has the unique ability to target specific audiences. Because it is extremely cost-effective when compared to other automotive advertising options, radio also affords auto dealerships the ability to saturate their market with their store’s message with great reach and frequency. Those are some of […]

roman google invitation

Christy Roman Invited to Google VIP Conference

Christy Roman, President of JKR Advertising & Marketing’s digital group, has been invited to attend the prestigious Rethink at Google “Internet immersion” conference on February 20. The group will focus on “rethinking” processes and digital marketing strategies. Roman leads JKR’s digital marketing agency NOW Digital, which JKR acquired late last year. The conference, hosted by […]

Best Commercial Length

What’s the Best Commercial Length?

What’s the best commercial length? That is a question we are asked frequently, and it isn’t one that can be easily answered in one or two words. It’s a subject that has been debated for a long time. Nearly all radio and television commercials dating back as far as the 1950s were all 60 seconds […]

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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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