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How to make your dealership recession proof — Jason Frampton | Ken Garff Auto Group

Ken Garff Automotive Group, ranked ninth on Automotive News’ list of the top 150 dealership groups, continues to invest and grow their operations. On this episode of Inside Automotive, host Jim Fitzpatrick is once again joined by Jason Frampton, Market President of Ken Garff Automotive Group, to discuss how dealers can navigate a changing market and prepare themselves for a possible recession.

Independent storeowners may have concerns about large franchises like Ken Garff, feeling that they are harder to compete with. Frampton notes that his company has had great success adding new dealerships in Arizona, Wyoming, Ohio and Texas. However, many of the stores recently added to the Ken Garff conglomerate were not only surviving, but thriving as standalone businesses. Although working under a larger umbrella offers distinct advantages such as bigger marketing budgets and legal teams, Frampton believes that well run, independent dealerships are still extremely competitive in today’s market.

"A well run standalone dealer can still be as every bit as successful as they've ever been." - Jason Frampton

The used car market has been especially troublesome for dealers to navigate, due to price fluctuations and renewed OEM production. Much of the frustration, Frampton explains, comes from a lack of preparation. Retailers became too comfortable with the unnatural sales environment of 2020 and 2021, when used vehicles suddenly began to appreciate. When the market normalized, these storefronts were caught off guard, failing to take an aggressive, competitive stance in time. Assuming prices drop again in the near future, dealers will need to re-adopt old-school sales tactics. “It doesn’t matter if prices are high or prices are low,” comments Frampton, “we can make good money if we’re willing to treat it like a true market.”

According to economists, the probability of a recession arriving later in the year remains high. Although such an event is unlikely to have a massive impact on the car business, dealers will still need to prepare themselves if they want to protect their bottom dollar. Frampton suggests two strategies.

First, dealers should return to a Variable Selling Gross (VSG). By keeping their costs in line with sales, storefronts can maintain their profit margins regardless of demand, protecting themselves in the event that economic headwinds. Although profits may still be suppressed, such a balance is essential to preventing losses brought on by a recession.

Second, storeowners should avoid acting as if the economy is in a recession. “It becomes a self-fulfilling prophecy,” explains Frampton. Rather than worrying over the economy, retailers should instead concentrate their energy into satisfying the demand they have. Even if sales decline, other departments, such as service, still have opportunities to make sufficient revenue.

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Colin Velez
Colin Velez
Colin Velez is a staff writer/reporter for CBT News. After obtaining his bachelor’s in Communication from Kennesaw State University in 2018, he kicked off his writing career by developing marketing and public relations material for various industries, including travel and fashion. Throughout the next four years, he developed a love for working with journalists and other content creators, and his passion eventually led him to his current position. Today, Colin writes news content and coordinates stories with auto-industry insiders and entrepreneurs throughout the U.S.

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