Midyear Checkup: 5 Vital Signs for Auto Dealerships

Depending on who you asked late last year, automotive dealerships were either in for a terrible ride in 2023 – or else they predicted business as usual.  

Now that we’re nearing the halfway mark of 2023, the guessing game is over, and you know the road you’re on. Of course, your mileage may vary, but if your dealership isn’t headed in the direction you want to go – or if you’re on the road to success and want to ensure a smooth ride – here are five key vital signs to monitor for the health of your business: 

Financials and Operations

First and foremost, you’ll want to dig into your financial statements. Key indicators to focus on include gross profit, net profit margin, return on investment (ROI), inventory turnover ratio, and liquidity ratios. Taken together, these metrics can give you a good snapshot of your dealership’s overall health. Hand in hand with financial analysis is operational analysis. How efficiently are you able to manage not just the obvious job of getting new customers into the driver’s seat but also day-to-day operations, such as payroll, maintenance, and accounting? One way that both large and small dealerships find greater efficiency and cost control is by outsourcing functions such as financing, HR, marketing, and titling and registration. For example, our company, Automotive Titling Company, handles the entire titling and registration process for dealerships from start to finish. By using services such as ours, you can grow or scale your dealership’s capabilities without having to take on additional costs in staff, overhead, and training.  


Good inventory management boosts profitability for auto dealerships. Having a clear, current assessment of turnover speed, aging inventory, and carrying costs helps your team make smarter, more strategic decisions. What’s more, the better you manage your current inventory, the easier it is to acquire new inventory and keep up with market demand. Now is the time to make up for the inevitable losses that many dealerships endured when consumer confidence was in the basement. 

Marketing and Advertising

Despite how powerful word of mouth is, don’t rely on it. And it goes without saying: so much of what you do to promote your dealership should be digital. For many customers, your first impression will be made online, so it’s important that you have a good website that’s easy to use (and with accurate inventory) and social media pages that make it easy and entertaining for customers to get to know you. Especially in markets where your dealership is competing for attention with many others, and you’re not the biggest or only game in town, good marketing and advertising will help you win customers who may otherwise not have seen you. Smart dealerships found the silver lining in the COVID-19 pandemic by taking a serious, disciplined look at their marketing efforts. How are you different? How do you make the whole process of buying or selling an auto better? Easier? Faster? Less expensive? Answer that, leverage it, and capture more of your market. 


Understanding in detail how well your sales team is doing and what challenges they face helps keep revenue flowing and inventory moving. Key metrics to consider include total vehicle sales, average transaction price, gross profit per vehicle, and sales growth rates. Additionally, analyzing sales by vehicle type, brand, or model can help identify strengths and weaknesses within the dealership’s sales strategy. And although the end goal of sales is, well, a sale, it’s important to be mindful of customer experience. As customer experience keynoter Blake Morgan writes in the July 14, 2020 issue of Fortune, “Customer experience focuses on more than just the end sale—it’s about everything the customer feels and thinks during the entire process. Customers want to be valued and seen as individuals, not pushed into buying something they might not need. Hearing a sales pitch that is obviously given verbatim to every single person doesn’t create a strong relationship.”

Employee Performance and Satisfaction

Finally – and arguably most importantly – happy employees are more likely to do great work, and that boosts your dealership’s chances at success in both tangible and intangible ways. A 2015 study conducted by researchers at the University of Warwick found that happy employees were 12 percent more productive, resulting in greater revenue and performance for the organizations that employed them. There are obvious things you can do – and likely already are doing – such as ensuring a civil and safe workplace, valuing individual contributions, and fostering respect. Those certainly carry you a long way but even better is to pair this ethos with an equally strong commitment to making sure your team has all of the tools, tech, and resources they need to do their jobs as easily and effectively as possible. Things such as sales and marketing software, apps designed specifically for inventory management, and automotive-industry-specific services (such as the titling and registration services we offer here at Automotive Titling Company) can help turn time-consuming but necessary work into much simpler operations, which gives your team time to do what they do best: get people into the driver’s seat.