Skip to main content
Sister Publication Links
  • Rubber News
  • European Rubber Journal
Subscribe
  • Login
  • Register
  • Subscribe
  • Current Issue
  • BEST PLACES TO WORK
  • News
    • HUMANITARIAN
    • TIRE MAKERS
    • COMMERCIAL TIRE
    • GOVERNMENT & LAW
    • MERGERS & ACQUISITIONS
    • OBITUARIES
    • OPINION
    • MID YEAR REPORT
    • SERVICE ZONE
  • ADAS
  • Data
    • DATA STORE
  • Custom
    • SPONSORED CONTENT
  • Resources
    • Events
    • DIRECTORY
    • CLASSIFIEDS
    • SHOP FLOOR
    • AWARDS
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
    • RUBBER NEWS EVENTS
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
    • Best Places to Work
  • ADVERTISE
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
June 14, 2012 02:00 AM

Car dealership count rebounding — NADA

Jamie LaReau, Crain News Service
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    DETROIT (June 14, 2012) — The great (car) dealership shakeout has ended.

    The National Automobile Dealers Association (NADA), in a new report, said there were 66 new U.S. auto dealerships during the first quarter and the figure could climb as the auto industry recovers from the downturn.

    NADA said the consolidation in the number of U.S. franchised dealerships has slowed significantly after net losses of 1,550 dealerships in 2009, 760 in 2010 and 160 in 2011.

    The trade group said there were 17,540 U.S. dealerships at year-end 2011, compared with 17,700 at year-end 2010.

    “The arrival of new brands and new dealerships is a sign that even more vigorous competition is on the way in the U.S. vehicle marketplace,” said Paul Taylor, NADA's chief economist, in a prepared statement. “As new brands enter the U.S. market, the net dealership count may increase in future years of strong economic growth.”

    The findings are part of “NADA Data 2012,” a report released Monday by the trade association. It's the group's latest state-of-the-industry report on dealership financial trends.

    Dealership groups shopped for acquisitions last year, and manufacturers restored some dealerships and “inaugurated others as new brands opened for U.S. business,” the report said.

    The NADA study follows other recent reports that auto makers are adding U.S. sales points as light-vehicle demand steadily rebounds after plunging to 10.4 million units in 2007. U.S. new-car and -truck sales have increased 26 percent through May and are on track to hit 14 million units or more in 2012.

    Urban Science, a dealer consulting firm, said it found 30 dealerships have opened in the U.S. since Dec. 31. Some of the new dealerships reflect brands and dealers that have decoupled; for example, a VW/Kia dual dealership becoming two stand-alone stores, Urban Science said.

    Several large dealership groups have recently been awarded new franchises — “add points,” in industry parlance — or are in discussions with manufacturers about new points.

    Dealerships are being added by Asian and European auto makers with ambitious sales goals. New sales points also are being added by domestic automakers that lost representation in key markets after thousands of dealerships went out of business during the recession or were terminated by General Motors Co. and Chrysler Group under bankruptcy.

    The number of light-vehicle franchises in the U.S. remained virtually flat, falling 78 franchises or less than 1 percent from a year ago to 29,231 as of Jan. 1, a separate study by Automotive News found. The number of dealerships that house those franchises edged up 1 percent to 17,859, according to the annual census compiled by Automotive News using data provided by auto makers and some estimates.

    It's a sharp change from 2010, when the number of franchises dropped 16 percent to 29,309 and the number of dealerships dropped 5 percent to 17,653 as of Jan. 1, 2011.

    The average U.S. auto dealership also saw profits rise last year as the three-year nationwide consolidation of dealerships stabilized, NADA said.

    The growth in new-vehicle sales helped boost the average dealership's net profit before taxes. Last year, the average dealership's net profit before taxes rose 24 percent to $785,855 from $635,926 in 2010.

    Employment at dealerships also rose about 5 percent to 933,500 in 2011.

    The average dealership saw new-vehicle revenue rise in 2011 to $18.9 million or 54 percent of total dealership sales from $16.6 million or 53 percent in 2010. Used-vehicle sales as a percent of total sales dipped slightly from $11.2 million or 32 percent of total sales to 10.2 million or 33 percent.

    The average new-vehicle selling price rose 3 percent to $30,659. The used-vehicle selling price jumped 5 percent to $17,267, the report said.

    Used vehicles contributed one-quarter of operating profit in 2011, down from one-third of operating profit in 2010, the report said.

    While profits were up, so were advertising expenses last year on higher unit sales.

    Franchised new-vehicle dealers spent just over $6 billion on advertising in 2011, up from just under $6 billion in 2010. But the average ad expense per new vehicle sold fell to $628, down 4 percent from 2010.

    Jamie LaReau is the finance and insurance reporter for Automotive News, a Tire Business sister publication. Auto News reporters Amy Wilson and David Phillips contributed to this report, which appeared on the publication's website

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

    Most Popular
    1
    Goodyear to trim jobs amid 'uncertain' economic outlook
    2
    Goodyear to upgrade Cooper plant in China
    3
    Executives on the move: Hankook promotes key U.S. positions
    4
    Our View: Early look at tire industry in 2023
    5
    Yokohama secures OE fitments on 2023 Prius models
    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • Instagram
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    Reader Services
    • Staff
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • Digital Edition
    • Careers
    • Ad Choices Ad Choices
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • BEST PLACES TO WORK
    • News
      • HUMANITARIAN
      • TIRE MAKERS
      • COMMERCIAL TIRE
      • GOVERNMENT & LAW
      • MERGERS & ACQUISITIONS
      • OBITUARIES
      • OPINION
      • MID YEAR REPORT
      • SERVICE ZONE
    • ADAS
    • Data
      • DATA STORE
    • Custom
      • SPONSORED CONTENT
    • Resources
      • Events
        • ASK THE EXPERT
        • LIVESTREAMS
        • WEBINARS
        • SEMA LIVESTREAMS
        • RUBBER NEWS EVENTS
      • DIRECTORY
      • CLASSIFIEDS
      • SHOP FLOOR
        • BALANCING
        • DEMOUNTING
        • SAFETY
        • TIRE REPAIR
        • TPMS
        • TRAINING
        • VEHICLE LIFTING
        • WHEEL TORQUE
      • AWARDS
        • Best Places to Work
    • ADVERTISE
    • DIGITAL EDITION