Rising sales boost profit
Dealerships bounce back from the recession, NADA finds

NADA: Dealer revenues like never before

Rising sales boost profit

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Dealerships have more than bounced back from the recession. Fewer stores and the recovery in vehicle sales meant record revenues and profits for dealerships last year.

The average dealership took in $41.3 million in sales revenue in 2013, according to NADA Data 2014, the annual report on dealership sales and financial trends released last week by the National Automobile Dealers Association.

That marked a 9 percent jump from the prior year and, unadjusted for inflation, set a record, topping even the pre-recession years.

“We’ve seen the recovery in sales, but we haven’t seen a return in terms of the number of dealers,” said NADA Chief Economist Steven Szakaly.

Rising vehicle sales and higher overall revenues drove the average dealership’s net pretax profit up 10 percent last year, to $923,248, surpassing the record set in 2012. NADA has conducted the study since 1970.

According to NADA Data, there were 17,665 dealerships in the United States in 2013.

For the dealerships that survived the recession, the decline in stores led to improved throughput, or more sales per outlet. In 2009, during the low point of the recession, the average store took in $26.6 million in sales revenue. The highest average during the four years that preceded the recession was $33.4 million in 2007.

Average dealership revenue is likely to rise again this year, said Szakaly, who predicts an 800,000-unit increase in new-vehicle sales this year from 2013’s 15.6 million.

Record results
Data for the average U.S. franchised new-car dealership in 2013
  CHANGE FROM 2012
Revenues$41.3 million*9%
Pretax net profit$923,248*10%
*Record Source: NADA

You can reach Amy Wilson at awilson@crain.com.


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