NADA: U.S. dealers' average pretax profit rose 6% in 2012

U.S. car dealers had a good year in 2012.

Higher new- and used-vehicle retail sales volumes and prices pushed revenues higher, resulting in a 6 percent rise in pretax profit at the average U.S. dealership, even though total dealership pretax margins eased slightly.

That's according to NADA Data 2013, an annual report on U.S. dealership sales and financial trends compiled by the National Automobile Dealers Association.

The report, released today, also shows that in 2012, there was a net increase of 95 U.S. franchised dealerships, bringing the total to 17,635 at year end.

Most of the new franchised dealerships were added in the Western regions, with a drop in the number of franchised dealerships in the Eastern regions, the report said.

Profits up, margins down

Total dealership pretax profit margins slipped to 2.2 percent from 2.3 percent, the report said. The average dealership generated pretax profits of $843,697 in 2012, up 6 percent from $794,536 in 2011.

Total dollar sales at new-car dealerships increased 9 percent in 2012, the third full year of post-recession growth, the report said. Revenues rose 13 percent in the new-car department and 7 percent in the used-car department.

A 13 percent gain in new light-vehicle sales volume; a 0.8 percent rise in the average selling price for a new light vehicle, including accessories and options; and lower floorplan costs because of low interest rates helped support new-vehicle profits last year, the report found.

Net profit per new vehicle retailed rose to $111 from $23 in 2011.

The average 2012 used-vehicle retail selling price was $17,547, up 2 percent from $17,267 the previous year. Net profit per used vehicle retailed fell to $194 in 2012 from $269 in 2011.

Staff and wages

Total dealership expenses rose 4 percent last year, to about $4.4 million for the average dealership.

Dealerships added staffers and paid them more as the economy gained momentum last year. And the trend appears to be continuing this year in various parts of the country.

Total employment at new-car dealerships rose 3 percent to 963,400 employees from 933,500 a year earlier.

The average number of employees per dealership rose to 55 from 53 last year, the report states.

New-car dealerships had an annual average payroll of about $2.9 million in 2012, up 12 percent from the previous year. The total payroll for all U.S. new-car dealerships was $51.6 billion, up 13 percent.

The average weekly earnings of employees at U.S. new-car dealerships last year was $1,030, up 9 percent from the previous year.

U.S. vehicle sales at new-car dealerships accounted for 15 percent of total U.S. retail sales, the report said. New-vehicle dealerships accounted for 12 percent of total U.S. retail payroll, and their employees accounted for 6 percent of total U.S. retail employment.