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Dealership Spokesperson

Should an Auto Dealer be the Dealership Spokesperson?

Your dealership spokesperson could be one of many people … or you may not have one at all. But whatever you decide, be sure you do it with a great deal of thought – and then stick to it. While there isn’t necessarily one correct decision, there are a number of certain wrong ones, according […]

Auto Newsletters

Auto Newsletters are Customer Retention Tools

Auto newsletters help retain customers. This is still very much a fact despite the changes in the way an automotive dealership markets itself to the general public. In today’s automotive advertising world where repeat customers are more important than ever, auto newsletters are an underrated yet highly useful tool to keep your customers coming back […]

Experienced Agency

Why You Need an Experienced Agency

An experienced agency can make a huge difference in the fortunes of an automotive dealer in a lot of ways. Why? For starters, it’s far better to work with a team of seasoned automotive advertising specialists like JKR Advertising than doing your own advertising. But we also give you this piece of advice: Don’t just […]

Holiday Advertising

Holiday Advertising Ruled by TV and Radio

It’s holiday advertising season again. Each year at this time, every automotive advertising agency is planning their holiday budget allocations, readying advertisements for the purpose of getting the most people into their showrooms in the shortest possible time. While a lot can be said about online advertising and e-mail promotions, TV and radio advertising are […]

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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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