BCG consulting case interview: auto dealership profitability case (w/ BCG and McKinsey Consultants)

Morgan Automotive Group, Florida's largest auto dealership chain, faces a significant decline in gross profit margins, dropping from 19.1% to 17.3% since 2023. Vehicle sales represent the primary driver of this downturn, exacerbated by rising interest rates and a shift toward online shopping. Despite these industry-wide challenges, the service and parts segment remains a resilient profit generator, showing slight growth even as overall margins shrink. To reverse the trend, the recommended strategy involves doubling down on the service business to leverage its stability and investing in digital capabilities to capture the growing online car-buying market. This approach prioritizes high-margin, stable revenue streams while adapting to evolving consumer behaviors that favor digital transparency and convenience over traditional in-person dealership interactions.