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Now Digital

JKR Acquires Now Digital to Enhance Online Services

We have some exciting news to share! JKR Automotive Advertising has acquired Now Digital, the automotive division of Orlando-based online company Now Marketplace. The acquisition gives JKR new levels of expertise and support as it grows its menu of digital marketing services. About Now Digital Now Digital’s offerings include Web site design and re-design; profit […]

First TV Advertisement

Where Was the First TV Advertisement?

Where did the first TV advertisement air in the United States? Much like the first radio advertisement, it’s really up for debate. Many people say the first television commercial aired on July 1, 1941, and advertised Bulova watches. This particular spot was 10 seconds long and cost $9 to air, during a day and age […]

Automotive Media Buyer

The Benefits of a Savvy Automotive Media Buyer

A skilled automotive media buyer is worth his/her weight in gold! Without one, it becomes very difficult to devise a successful automotive advertising campaign. After all, there are many media outlets in which a car dealer could advertise … and if you don’t know what makes the most sense for you, it becomes a game […]

Super Bowl Advertising

Super Bowl Advertising Down Among Auto Manufacturers

Super Bowl advertising among automobile manufacturers looks to be on the sharp decline this year. In last January’s 2014 Super Bowl, there were a total of 24 automotive advertisements that aired on FOX, the network fortunate enough to gain the rights to the big game. This year’s gridiron championship showdown will be seen on NBC, […]

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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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