2010: Dealership sales rise 16%

[rickaren]

Dealership sales rise 16% in 2010, should near peaks

Feb 17, 2011


Auto dealers sold on average 16% more vehicles per dealership in 2010 than in recession-ravaged 2009 and should approach their pre-recession peaks this year, according to the 2010 Automotive Franchise Activity Report from Detroit-based consulting firm Urban Science.

The number of dealerships fell by 4.4% in 2010 to 17,659, which is less than the 8% that either closed or were terminated or phased out in the aftermath of Chrysler and General Motors' bankruptcies.

Also noteworthy: Ford last year surpassed Chevrolet for the first time as the brand with the most dealerships, 3,131 vs. 3,084 for Chevrolet. Toyota had 1,241 and Honda, 1,034.

Fewer dealers also meant most of the survivors were more profitable, according to John Frith, Urban Science vice president.

Sales per dealership jumped to 656 vehicles last year from 564 in 2009.

The report predicts that if the U.S. industry sells 12.9 million cars and trucks this year -- a figure within the range of most forecasts -- sales per dealership could grow to about 745 this year, a level not seen since the peak years of the last decade when annual sales in the U.S. were between 16 million and 17.5 million vehicles.

"Sales are now concentrated among a smaller number of dealers," said Randy Berlin, the firm's global director. "Dealers have gone through major cost reductions, so the increased sales are going straight to the bottom line."

Despite the improvement, the nation's dealer network likely will contract again this year as Ford closes remaining Mercury dealers and reduces the number of Lincoln stores by at least 100 over the next year.

SOURCE