Dealership Throughput Expected to Slip for Third Year in a Row

Matt Posky
by Matt Posky
We’re committed to finding, researching, and recommending the best products. We earn commissions from purchases you make using links in our articles. Learn more here
dealership throughput expected to slip for third year in a row

While sales numbers are a decent metric for assessing volume, they don’t give an accurate representation of what’s actually happening at the dealership. Instead, the figure represents the number of models an automaker was able to move from the factory. Theoretically, a manufacturer could load up a bunch of trucks at the end of the month and count them as “sold” to bolster volume — whether or not real people actually bought them.

Dealer throughput is better for assessing the current consumer climate. But we’re sure you won’t be surprised to hear that it’s cold and only expected to get colder. U.S. dealership throughput, the average number of new-vehicle sales per dealership, is expected to slip 2.9 percent this year. That equates to a mean of 920 vehicles in 2018, down from 947 in 2017.

That could make this year the third consecutive decline in per-store sales, according to Urban Science’s annual Automotive Franchise Activity Report. However, it may be too early in the annum to start prognosticating the automotive industry’s doom.

One contributing factory to the last two years’ decline was the number of new dealerships. U.S. auto deliveries were actually up slightly in 2016, despite a very modest decrease in throughput. Unfortunately, volume for 2017 was down a bit and dealerships were cut a little deeper — going from an average of 965 cars to just 947.

With the number of stores inching up every so slightly at the start of this year, and new brands like China’s GAC and Europe’s PSA Group on the way, some dealerships could be in for harder times if the 2.9-percent decline in throughput ends up being accurate.

“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 in an interview.

While there has been some consolidation between brands, he noted, “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.”

Matt Posky
Matt Posky

Consumer advocate tracking industry trends, regulation, and the bitter-sweet nature of modern automotive tech. Research focused and gut driven.

More by Matt Posky

Join the conversation
3 of 12 comments
  • Doc423 Doc423 on Feb 14, 2018

    Wouldn't break my heart if "Stealerships" just went the way of the Edsel; just buy directly from the manufacturer via the internet, and open manufacturer-run repair centers where the old stealerships used to be.

  • Vulpine Vulpine on Feb 15, 2018

    Ever think the dealerships themselves are part of the problem. They offer so little real variety that it's silly. Black or one of two shades of grey are by far the most common with a red or blue an obvious standout--often lacking the very features a buyer would want. And sure, you can have a car 'skinned'... for $3K or more and needs to be replaced every 3-5 years, depending on whether the car is garaged or not. Even then, you have little to no choice of interior colors which means you've done little to personalize the car. Hey, I came from an age where color variety was standard and you had as many as 20 colors and hues to select from; not a mere five. You had no less than four DIFFERENT interior colors, often with that many more two-color interiors featuring complementary shades. Ford seems to be improving on this, but even there many of those colors are so dark that the difference in hue is almost invisible except under very specific lighting conditions.

    • Kcflyer Kcflyer on Feb 15, 2018

      Exactly this. I am thinking of helping my son get into a new MX5 Miata. I would co sign the loan since he has no credit history. He would provide a significant down payment and cover all the payments and insurance. The idea would be for me to buy the car from him in a few years when I feel he is mature enough not to kill himself in the car he really wants. But I cannot believe that Mazda only offers one color of interior, black. Why oh why would anyone want black seats in a convertible? Leave the top down on a sunny day and in minutes the seats, especially if they are leather, are too hot to sit in comfortably. Oh and as for exterior colors you ask? You get two shades of grey (not fifty), white, black or red. No blue, no British racing green, no yellow, etc. This is a sports car. People buy them because they like cars. Where is the logic?

  • Tassos Unlike Tim, I don't use this space as a wastebasket for ANYTHING BUT a proper used car.If you seriously need a car AND you are as destitute as Tim's finds imply, HERE IS A PROPER ONE FOR YOUR NEEDS:You can probably get it for only $4k, WITH Leather, Factory Navigation, plenty of room and a V6. even considered getting it myself as an extra reliable car.
  • Jeff Of all the EV trucks I like the Rivian the best but I am still years away if ever from buying an EV.
  • Kwik_Shift I definitely like the looks of the newest 300s over the Chargers.
  • SCE to AUX "Should car companies shack up with tech giants in order to produce legible infotainment systems and the like? Or should they go it alone?"Great question(s).The River Rouge days are gone, where Ford produced whole cars out of raw materials entering the plant at the other end. Nearly everything is outsourced these days - sometimes well, sometimes disastrously.But the problem with infotainment systems is that they are integrated with the car's operation. VW has delayed entire products for issues with infotainment.For me, the question boils down to a contractual arrangement - who owns and maintains the code forever? Since more and more of the car's function is tied to the infotainment system, I'd argue that the car mfr needs to own it - especially the larger ones.Do mfrs really want to share intellectual property with Huawei just to fast-track some code they've managed themselves in the past?
  • Kwi65728132 I always did like the styling of the 300C and it was on my short list for a new (to me) rear wheel drive, naturally aspirated V8 luxury sedan but I found a Hyundai Equus that was better optioned than any 300C I could find and for several grand less.