Average New Vehicles Sales Per Dealership Set to Decline, While Overall Number of Dealerships Set to Increase
Whereas each dealership is set to sell fewer new vehicles on average during 2018, the number of dealerships in the U.S. is set to grow during that period
Dealerships are preparing for another year of average sales declines
Projections for new vehicle sales in 2018 have already been extensively covered and discussed. The general consensus is that new vehicle sales are set to decline once again during 2018, following a record number of sales throughout 2016.
What has been discussed by fare fewer people is how many new vehicles will be sold per dealership. Known as dealership throughput, the average number of new vehicle sales per dealership is projected to decline for a third consecutive year.
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Estimations place dealership throughput at 920 new vehicles per dealership during 2018. This would account for a 2.9% decline from the 947 new vehicles per dealership sold during 2017.
2017’s throughput level, in turn, is down by 1.9% compared to the 965 new vehicles sold per dealership in 2016. In 2015, dealership throughput reached a new record of 966 new vehicles per dealership.
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But while dealership throughput might be on the decline, the number of dealerships in the U.S. is actually on the rise. At the beginning of 2018, there were 18,213 dealerships spanning the country. At the beginning of 2017, there were 18,170 dealerships.
This increase, of course, isn’t a very large change, and 97% of local U.S. markets had virtually no change in their number of dealerships. At the same time, certain states are acquiring dealerships at a much more rapid pace.
Texas gained a total of 15 new dealerships last year. Following closely behind the Lone Star State was Florida, with 11 new dealerships, and Pennsylvania, with 10 new dealerships.
China is determined to enter the American automotive market
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This increase in dealerships could receive a boost from rumored newcomers entering the U.S. market. China’s Guangzhou Automobile Group is planning out a U.S. launch for its Trumpchi brand, while French automotive company PSA hopes to enter the U.S. market as well.
“As it stands right now, for the past several years, it has been a slight increase — like 30 [or] 40 per year — in the number of rooftops,” Mitch Phillips, the global data director at Urban Science, told Automotive News. “A couple of brands that have planned to come in, in the next several years, might increase the number of rooftops or keep them stable as they use existing stores.”
New dealerships creates competition for existing dealerships, and with dealership throughput already expected to decline, a growing competitive market likely means fewer new car sales for dealerships nationwide.
News Source: Automotive News (subscription required)
Zachary Berry currently resides in the Dayton, Ohio area. However, he enjoys traveling from place to place, as he was born in Oklahoma City and has also lived in Albuquerque and Orlando (such is the life of a military brat). Zachary graduated from Ohio University with a major in Strategic Communication, which is fancy talk for advertising and public relations. Beginning his career at The News Wheel as a lowly intern, he was able to climb his way to the top, eventually claiming his place within the last cubicle on the left. Other jobs that Zachary has held include driving around a safari truck at Disney’s Animal Kingdom. When he’s not putting his nose to the grindstone, Zachary enjoys watching and critiquing movies and television. See more articles by Zachary.