Dealers expect 2015 to be another good year, though perhaps not quite as good as 2014.
They headed to San Francisco for the National Automobile Dealers Association convention after just having closed the books on what was, for almost all of them, a profitable 2014 -- notably, even in the new-car department.
Looking ahead, they're adding headcount, but they see more revenue potential in used vehicles than new ones. Those are the conclusions from an unscientific online survey that Automotive News conducted as last year was wrapping up, Dec. 15-18.
Of the 148 respondents, 71 percent said they expect vehicle sales at their dealerships this year to be better or much better than last year. That's down from 74 percent a year earlier, and 82 percent going into 2012, when the industry was still rebounding smartly from the recession.
The modest overall change masks a loss of some euphoria. Just 8 percent said they expect vehicle sales to be much better in the coming year, down from 15 percent a year earlier and 18 percent in early 2012.
"About the same" was how 25 percent of respondents summed up their sales expectations for this year, up from 23 percent a year earlier and just 15 percent in 2012.
In 2014, 94 percent of respondents said their dealerships were profitable. That was off slightly from 96 percent a year earlier.
But 78 percent said their new-car department was profitable last year, up sharply from 69 percent a year earlier.
This year will be another profitable one, survey respondents said. The outlook for 2015 is for better or much better profits, said 72 percent of respondents. That is little changed from 71 percent a year earlier but off from 76 percent going into 2012.
But again, the froth is subsiding. While 9 percent said they expect much better profits in the new year, that's down from 12 percent a year earlier.
One anonymous respondent backed up his rosy view of 2015 with the following comment: "Cheap gas, low interest rates, free flowing credit and rising consumer confidence. It could be a record year for dealership profitability in the U.S."
But another saw a cloud accompanying that silver lining: "In my view, the major challenge in 2015 is the valuation of used cars. As the industry bumps up to the 17 million number no manufacturer wants to backslide relative to market share. As a result we will see the most robust marketing support of all time. We all know what that does to used values."
Yet another offered these cautionary words: "The economy is not growing fast enough, so expectations are the same as last year if not worse. Used-car inventory is still the greatest difficulty."
Even if they're becoming more guarded in their optimism, dealers are investing in the future. Of the respondents, 51 percent say they plan to expand, renovate or add to their dealership's physical facilities this year, up from 44 percent a year earlier.
And 64 percent said they're adding headcount, up 10 full percentage points from 54 percent a year earlier. Crowed one anonymous respondent: "We are in a growth mode and we will be adding staff in every department in 2015."
Meanwhile, 52 percent said they see the greatest revenue potential in used-vehicle sales, up from 43 percent a year earlier.