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Dealership Deflategate

The Dealership Deflategate Solution: JKR Automotive Advertising

The drama concerning Deflategate gets more interesting by the day, as the National Football League continues to look into why 11 of the 12 footballs used by the New England Patriots in this year’s AFC Championship Game were significantly low on air. Regardless of the ultimate verdict, the Patriots certainly left the Indianapolis Colts and […]

Why We Recommend TV Advertising

Why We Recommend TV Advertising

Here are the reasons why we recommend TV Advertising. The bottom line is, TV is the most powerful advertising source available. Businesses of all sizes – auto dealerships included – use TV Advertising to build their brands, attract customers, increase credibility and make sales! Dealers Still Bullish on TV Advertising Many of today’s automotive dealers […]

Brand Compliance is One of Our Strengths

Brand compliance is a big deal in the world of automotive advertising. The vast majority of new-car dealerships depend heavily upon co-op reimbursement dollars from the corporate entity of the brand(s) they sell. This money goes a long way toward helping them get the reach and frequency they need to make their automotive advertising campaigns work. […]

Difference Between Advertising and Marketing

The Difference Between Advertising and Marketing

Do you know the difference between advertising and marketing? Many people think they are the same, while others sometimes confuse advertising with marketing or vice versa. For an auto dealer, they are both very important … but different. Today’s blog will focus on helping you understand the difference between advertising and marketing. The best place […]

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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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