U.S. New Vehicle Dealerships May Post Record High Sales this Year

Detroit-based retail consulting firm Urban Science predicts the average U.S. new vehicle dealership will post record sales this year.  Based on a mid-year survey and projected full-year sales of 14.3 million units, the firm estimates the average U.S. auto franchise will sell 805 new vehicles in 2012.

The firm’s vice president of retail channel solutions, John Frith, says that the average dealership would sell 788 units this year based on a more conservative prediction of industry-wide, U.S. sales totaling 14 million vehicles.

Frith says that either scenario would set a new record by eclipsing the 784 average sales per dealership in 2005.

According to Frith, “The first six months of the year have been very good for the automotive retailers. The automakers have kept their dealer networks relatively flat. That gives the existing dealerships the opportunity to take advantage of the increased sales volumes.”

The firm is also predicting a slight increase in the number of U.S. dealerships this year.  At the beginning of the year, there were 17,767 new vehicle dealerships in the U.S. As of June 30, that number had increased by three, to 17,770. Last year, 108 new dealerships opened for business in the U.S.; an increase of one percent. Urban Science says that prior to last year, the industry was experiencing average annual declines in the number of dealerships of about two percent.

Urban Science also pointed out that although the total number of U.S. dealerships has increased this year, the number of franchises has fallen by one percent to 29,233. The decline was due in large part to the elimination of 187 Saab dealerships.

Arizona, California, Florida, Iowa and Texas all saw increases in the number of new vehicle dealerships within their borders, while Georgia, Illinois, Ohio, Maine, Pennsylvania and Tennessee all lost dealerships. Michigan has lost ten dealerships this year.

Urban Science says 85 percent of U.S. market areas saw no change in the number of dealerships. Frith said that number increases to 95 percent if markets that lost or added only a single dealership are included in the calculation. He also said that he expects the numbers to remain fairly stable for the foreseeable future. “We seem to be settling in about 17,770,” he said. “We’ll probably stay there for a little bit.”

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