How Dealers Can Combat Low Gross Profit Margins

Gross Profit MarginsA big issue confronting auto dealers in recent years is lower gross profit margins on sales of automobiles. Lots of variables come into play, of course, such as the brand(s) sold, the marketplace in a given market and the business acumen (or lack thereof) of the management staff … but almost everyone across the board will tell you their profit margins aren’t what they once were.


Why Low Gross Profit Margins?

A 2015 article in Automotive News took on this very topic, saying the following: Lurking behind the results from five publicly traded dealership groups last week was a disturbing trend: Profit margins on new-vehicle sales fell at all five companies. Some dealership group executives blamed tougher competition, particularly among mass-market import brands. Others cited shifting consumer tastes and lower gasoline prices. Still others said there was a drive for volume over margins, and they defended that trade-off.


There it is! In order to sell more cars, they sacrifice profit … and many dealers are more than willing to do so. But here’s the thing: you don’t have to settle. You should want your dealership’s ads to contain everything necessary make a potential customer want to come buy a vehicle from you – and ask for the exact offer that they saw or heard in the commercial. (Hint: A dealer wouldn’t make that offer unless it was a moneymaker for them … and that is where the improved gross profit margins happen; when your ads bring in not only more customers, but better customers, too!)


FREE Advertising Review

If meeting and exceeding your sales goals (and increasing gross profits at the same time) sounds great to you, call us today. Don’t be satisfied with status quo when there’s something far better out there for you and your dealership. Want to know how JKR Automotive Advertising does it? Call Eric Tigner today at (321) 397-0777. For your efforts, we’ll send you a no-strings-attached FREE advertising review that tells you all about the effectiveness of your current strategies – and a whole lot about your competitors. This information alone is worth your time … and then some!


JKR Automotive Advertising: We Move Cars.