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Drive to Success: Margin Compression Continues to Stress Auto Dealers

by Lindsay Lauck
on July 8, 2019

Automotive dealerships continue to battle for profits every day. With changing consumer buying habits, more options for buying and using cars, and a highly competitive market, dealers are still struggling with shrinking margins. Can dealers working in an industry that continues to become more and more complex find a simple solution? Or, will it take creativity, technology, and skill? Read more:

1 – The Most Effective Way to Reduce Margin Compression at Your Dealership – Dale Pollak, vAuto

CBT Automotive Network: In this interview with Dale Pollak, executive vice president at Cox Automotive and founder of vAuto, you’ll hear advice for reducing margin compression at your dealership in 2019.

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2 – Supplier Consolidation= Higher Prices= More Profit Challenges

Digital Dealer: Dealer profits are constantly being challenged from all angles, and it’s up to dealers to get smart, savvy, and creative when it comes to supplier consolidation.

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3 – If 100% fixed absorption is magic number, many dealers have work to do

Automotive News: According to the National Automotive dealers Association (NADA), the average fixed absorption rate for U.S. dealers is 57%, when their average profit margins are coming in lower at 47%. So where are dealers making up the money?

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4 – Digital Retail: The Solution for F&I Profitability

Agent Entrepreneur: Customers have been telling us for years that financing is the most dreaded step in the auto-buying process. As more F&I options move beyond the dealership, what can Digital Retailing do to help your dealership build a more convenient solution for your buyers?

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5 – The Dealer’s Only Move is to Customer-Centricity

Dealer Solutions: Many dealerships rely on fixed-operations to counter the growing gap of margin compression. But, according to Cox Automotive Service Industry Study, only 33% of all service visits in the US are taking place within the dealership. That’s a lot of missing opportunity just waiting to close the gap…

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Check back next week for more Drive to Success.

 

Tags: DMS, Drive to Success, Margin Compression

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