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