You need to focus on what people dislike about the car buying experience. The biggest of which is that they don't want to feel that they have been taken advantage of or ripped off.
Here is how I would go about it.
First, you need to define all of your revenue streams. For a car dealership, I believe them to be:
New car sales
Used car sales
Financing (for the new and used cars)
Service
Parts
The next step is to define an acceptable overall gross margin by category and for the operation as a whole. Once I have my cost of the products (pretty much just cost-of-goods plus OPEX since your have removed CAPEX from the equation) and my margin, my selling prices are defined. It is not that simple, you may need to adjust margin on competitive factors and market conditions, but you get the idea.
For sales, you focus on the experience and the customer. I would outfit the showroom with large displays (big screen TVs) that would show the cars that I had in inventory or coming in, and their sales price. There would be no one there to negotiate with. My people on the floor would be either local school teachers working part-time or retired police, firemen or others from the community. They would not be paid a commission, only an hourly wage. Their job would be to make sure the customer finds the right car for them and has a pleasant experience. They would all be trained in the process of completing the paperwork and the sale and be able to perform it quickly without errors. They would also be trained and ranked on customer service skills.
I would take a similar approach for Service.
I would also take a different approach to marketing and advertising. Print and media advertising costs a lot of money. I would enlist, engage and entice my customers to become part of my sales force. For each new customer that they sent me, they would accrue some sort of reward. It could be a discounted or free service, like an oil change. The tracking mechanism would need to be defined/refined, but should not be too difficult.
You have to remember everything needs to be about the customer and their experience. We like to be able to tell our friends about the great treatment that we had at XYZ dealership and be confident that they will be treated the same.
Last, I would post on car-related Internet forums looking for customers.
