The Internet is in place and growing like a weed. Publicly traded dealer groups show no signs of leaving, so franchised dealers must be cashing in their chips, right?
Wrong. Franchised dealers just completed their most stable year since 1986.
As Automotive News reports in today's issue, 22,038 new-car and light-truck dealerships were doing business in the United States on Jan. 1 of this year. That was down just 38 from the total on Jan. 1, 1999. Does that sound like a dying industry?
True, those 22,038 dealerships are not operating as they did a decade ago. They're not even operating the way they did five years ago. But that's a fact of business life in this country.
What successful merchant is running the store exactly as in the recent past?
Dealers are using the best of the Internet. They're finding individual entrepreneurship easily is a match for some huge, faceless publicly held chain.
In the past year, they've beaten back attempts by the world's two largest automakers to make the factory store the be-all and end-all of auto retailing. Those are hardly the actions of a dying breed.
The dealership total has declined nearly every year since the 1950s, but the U.S. industry was grossly overdealered in the early postwar years, and that situation still is being corrected. A case in point: In 1965, Ford Division had 6,368 dealers, and it sold 2.4 million new cars and light trucks. Last year, Ford Division had 3,997 dealers and sold 3.4 million new cars and light trucks.
And don't forget the imports and new American manufacturers. Fourteen of the 27 international-badged marques sold in the United States have more than 100 single-line dealerships. At one time, only Volkswagen could afford to have more than a handful of exclusives.
Independent dealers will survive because they can adjust, adapt and overcome.