Dealership throughput forecast to slip for third year

U.S. dealership throughput -- the average number of new-vehicle sales per dealership -- is expected to slip 2.9 percent to 920 vehicles in 2018 from 947 in 2017, automotive consulting firm Urban Science predicts.

If so, 2018 would have the third consecutive decline in per-store sales, Urban Science"s annual Automotive Franchise Activity Report said.

U.S. dealership new-vehicle throughput slipped 1.9 percent in 2017 to 947, from 965 in 2016 and from a high of 966 in 2015, as sales fell and the number of dealerships edged up.

U.S. new light-vehicle sales slipped 1.8 percent to 17.2 million in 2017, ending a seven-year streak of increases.

Meanwhile, the U.S. dealership network held essentially stable, inching up to 18,213 rooftops as of Jan. 1, from 18,170 rooftops at the start of 2017.

Stable count

The report found that 97 percent of local markets in the U.S. had virtually no change in the number of dealerships, meaning they had a gain or loss of no more than a single rooftop.

The most growth took place in Texas, with 15 new dealerships, followed by Florida with 11 new dealerships, and Pennsylvania with 10. Mississippi, Missouri and New York trailed with five new dealerships each.

"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, global data director at Urban Science, told Automotive News. While there has been some consolidation between brands, he added, "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."


For example, China"s Guangzhou Automobile Group is gearing up for a U.S. launch, and is calling on dealers to sell its Trumpchi GS8 crossover. Meanwhile, French automaker PSA Group is planning to open its North American headquarters in Atlanta this month, as reported.

Based on trends, Phillips expects the dealership count to continue to be stable for the next several years, unless there are "major changes to the economy."

Jennifer Vuong contributed to this report.