Ever wonder what’s really going on behind those phony smiles and promises that "We’ll get this deal to work for you!"?
So did I, as it was nice to have a friend pass along a copy of the 2010 National Automobile Dealers Association "State of the Industry Report."
According to the 21-page report, new car, SUV and pickup truck sales “increased in 2010 to 11.55 million units from the previous year’s 10.4 million units. Sales should improve by about 11% in 2011. Typical dealerships saw sales increases in all depart¬ments for the year and costs moderated in relation to new-vehicle sales volume.”
The average new car dealership posted sales of $31.24 million in 2010, according to NADA, and grossed an average of $3.54 million. But net profit, on average, was a meager $642,057, or just 2.1% of revenue.
For 2011, NADA counts 17,700 new car dealerships in the U.S., down from 18,406 last year and 20,010 in 2009. So that means that, in total, car dealers accounted for about $553 billion in sales revenue. Yes, with a B.
California, by the way, has the most dealerships at 1,303 (all of them, I’m guessing, are BMW or Porsche dealers). Among actual states, Alaska has the fewest with 32, though D.C. claims 1.
The parts/service aspect of a dealer’s business isn’t broken down too well by the NADA, but the annual report said the average car dealer landed $4.39 million in such sales last year. The average dealer posted 13,818 repair orders in 2010, and the average customer ticket was $228. Seems to be low for car dealer service work, don’t you think?
Tires are not specifically mentioned or annotated in the report, but NADA did note that 78% of car dealers had gone to offering evening service hours, weekend service hours or both. The average dealer service department was working 56 hours per week in 2010.
In 2010, car dealers employed some 892,300 people, of which 522,100 or 59% worked as techs or in the service/parts department. The average car dealer carried an annual payroll of $2.39 million in 2010, averaging $913 per week in gross pay. This figure is not broken down by job position, so the amount will be impacted by commissioned vs. non-commissioned workers.
