Dealerships Can Get Profit Margins As High as 5% If They Implement Certain Changes

Published: Mar 3, 2014
Ben McLeod / Foter / CC BY-NC-SA

A new study conducted by McKinsey & Co. found that auto dealers can increase their profits if they adopt new training programs for their employees and offer “new sales formats”.

According to data by the National Automobile Dealers Association (NADA), the average U.S. car dealer ended the year with a profit margin 2.2%. Certain dealerships, however, have posted gains as high as 5%.

According to a McKinsey senior partner, Hans-Werner Kaas the perecentage can get hire for a lot of dealerships if they are willing to reform. Currently, close to 25% of consumers don’t feel dealers offer adequate customers service. Another issue to address is the rise of the mobile search, which a lot of retailers have not yet been prepared for.

Finally, investing in employee training programs that improve sales skills and boost motivation can also contribute to better profits.

Read the full article at Autonews.

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Victor Lance is the founder and president of Lance Surety Bond Associates, Inc. He began his career as an officer in the U.S. Marine Corps, serving two combat tours. As president of Lance Surety, he now focuses on educating and assisting small businesses throughout the country with various license and bond requirements. Victor graduated from Villanova University with a degree in Business Administration and holds a Masters in Business Administration (MBA) from the University of Michigan's Ross School of Business.