U.S. dealerships on track to post record throughput in 2012
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U.S. dealerships are poised to deliver record throughput in 2012, forecasts Urban Science, a retail consulting firm in Detroit that advises vehicle manufacturers.
In its midyear 2012 franchise activity report released today, Urban Science estimates that the average number of new-vehicle sales per dealership will increase to 805 units this year.
That is based on projected year-end sales of 14.3 million new vehicles. Even if sales come in at 14 million for 2012, dealerships would still sell an average of 788 vehicles this year, said John Frith, vice president of retail channel solutions for Urban Science.
Either would be an all-time high, Frith said, surpassing the current record of 784 vehicles sold per dealership in 2005. Per-store sales dipped to 564 units in 2009, as U.S. sales collapsed during the recession.
‘Very good’ times for dealerships
“The first six months of the year have been very good for the automotive retailers,” Frith said. “The automakers have kept their dealer networks relatively flat. That gives the existing dealerships the opportunity to take advantage of the increased sales volumes.”
Urban Science also sees the number of U.S. dealerships increasing slightly in 2012, which would mark the second straight year of store increases after two decades of near-steady decline.
As of June 30, there were 17,770 dealerships in the United States, a net increase of three stores since the beginning of the year. In 2011, the number of dealerships rose by 108 stores, a nearly 1 percent increase. Until 2011, the U.S. dealership count typically experienced a 2 percent annual decline, Urban Science says.
While the number of dealerships rose slightly, the number of franchises declined 1 percent to 29,233.
Saab’s fall
Saab was the biggest contributor to the decline. Saab eliminated 187 franchises across the country, including 59 stand-alone Saab dealerships.
Some states had minor changes in dealership counts through the first half. The states that added the most dealerships included: California, with an increase of 13 stores; Iowa and Florida, each with eight; Texas with five; and Arizona with four.
The states that lost the most dealerships included: Michigan, with a decrease of 10 stores; Ohio and Georgia, each with eight; Pennsylvania with five; and Tennessee, Maine and Illinois, each with four.
But 85 percent of the market areas across the United States experienced no change in dealership numbers, vs. 60 percent before the recession, Frith said. Add in markets that added or lost just a single rooftop, and 97 percent of all U.S. market areas were stable, he said. That stability bodes well for the next few years.
“We seem to be settling in about 17,770” dealerships in the United States, he said. “We’ll probably stay there for a little bit.”
You can reach Amy Wilson at awilson@crain.com.
