Dealership throughput set to rebound in 2021

The average number of new vehicles sold by U.S. dealerships is forecast to increase by more than 100 in 2021 — a significant rebound from throughput in 2020, which was the lowest level for the metric since 2012.

The throughput figure is forecast to be 910 vehicles this year, according to the midyear Automotive Franchise Activity Report released Wednesday by retail consulting firm Urban Science. That would be a jump of 103 vehicles from 2020's average sales of 807 vehicles per store. The last time there was a throughput rebound of around this size was in 2012, when the metric went from 719 to 812 vehicles.

Most forecasters and automakers anticipate U.S. new light-vehicle sales will range from 16.6 million to 16.7 million in 2021.

Even if achieved, the forecast throughput of 910 would still be among the lower marks of the last decade. From 2014 through 2019, annual throughput came in at 921 vehicles or higher.

Urban Science also said Wednesday that the number of U.S. new-vehicle dealerships increased, albeit slightly, in the first half of 2021. The count rose to 18,203 as of July 1, an increase of 46 stores from Jan. 1.

"It's a minor increase, given that there is that many rooftops," said Mitch Phillips, global director of data at Urban Science. "It's virtually no net change. So it's stable."

The increase comes after the number of new-vehicle dealerships declined in 2020 and 2019. The 2019 decrease was the first drop in six years.

California saw the biggest expansion in dealership count between Jan.1 and July 1 with 24 additional stores. It was the most-active period for the most-populous state in the U.S. since 2015, a year in which it added 16 dealerships, according to Urban Science. California lost seven dealerships in 2020.

California's growth during the first six months of 2021 was also significantly greater than the two states that were next biggest gainers: Texas, which added eight dealerships, and New York, which added five.

"For about two years, we've noticed that California was flat, if not losing a couple dealerships," said Phillips. The first-half increase in dealership count in that state "could be pent-up demand."

Tennessee had the largest decrease in dealerships for the six-month period with four fewer, while Illinois and Kansas were down two stores each.