Last year, new-car dealerships wrote 259 million warranty and customer repair orders, up 6.5 percent from the previous year. On average, express service at dealerships, such oil changes, increased 11 percent, while nonwarranty repair orders rose 4.2 percent.
The average dealership's revenue from sales -- including new- and used-vehicle sales, finance and insurance and fixed operations -- rose 5.1 percent to $59.6 million. The average number of new vehicles sold per dealership was 928, up from 916. The average selling price of a new vehicle increased 3 percent from 2015 to $34,449 and that of a used vehicle rose 2.5 percent to $19,866.
But the average dealership's total expenses rose more sharply than its revenue from sales, 6.5 percent, to $6.5 million. In turn, pretax profit dropped 2.4 percent to $1.5 million. The average dealership's pretax profit margin -- profits as a percentage of total revenue -- eased to 2.5 percent in 2016, from 2.7 percent in 2015 and 2.6 percent in 2014.
A big part of the higher expenses was because of staffing. New-car dealerships directly employed a record 1.1 million workers in 2016, up 2.4 percent from a year earlier. That was about 69 workers per dealership vs. 66 in 2015.
Dealers also paid more to attract and keep talent, Szakaly said.
Average weekly earnings of dealership employees rose 2.6 percent, boosting total annual compensation to an average of $69,000 per employee. Szakaly said that means dealership employees earn one of the highest average salaries of any industry. The average weekly earning per employee was $1,122.
The battle to hire service technicians helped drive up pay, said Szakaly.
"The service-tech shortage is reflected in the rising wages and earnings," he said. "That's why you see these rising wages in what you pay people so you can attract people to the industry."
While dealers hired in the service bay, the number of back office employees shrank, largely because of dealership consolidation, Szakaly said.
The number of dealership groups with 11 or more stores climbed to 138 in 2016 from 90 five years earlier, the study showed. Those with just one store decreased by 990 stores, or about 17 percent, since 2011 to 4,972 in 2016.