Dealership Throughput Expected to Slip for Third Year in a Row

Matt Posky
by Matt Posky
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.”

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  • 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?

  • SCE to AUX Let it die with dignity - no electrification. That would kill the spirit of the original.Mazda needs to think about survival and market share, not tinker with a niche car with waning sales, or dying on Wankel Hill.Maybe their body and paint engineers could help Tesla once Mazda folds.
  • Lou_BC H-E-L-L-C-A-T
  • EBFlex "EBFlex speaks more truth."It's sometimes a burden being right all the time.
  • MRF 95 T-Bird Add a couple of more body styles. A coupe with a vestigial rear seat like the BRZ along with a shooting brake version would appeal to a number of drivers who want something sporty but not a hatchback or crossover.
  • Theflyersfan It's the mother of all "ifs" - if Mazda gets the small rotary/hybrid combo going, I can see them using that in the next MX-5. Can they keep it under 2500 lbs and somewhat affordable? Not sure...this is why I don't run a car company! But if they want to replace it around 2025, and it's 2023 now, they need to get started very soon with some rumors and leaks to keep us going. But with the rest of their lineup going greener in next generations, and Mazda selling under 10,000 MX-5s per year, how does it really impact any average emissions and fuel economy ratings? If they can keep tweaking the Skyactiv-G engine for better fuel economy and fewer emissions, they should be able to get the NE generation using gasoline before being forced to go EV or hybrid with the NF. The mission of the MX-5 is light, affordable, open air fun and it's their halo car. And while I agree that EVs are going to be a much larger part of the future, the "all things by 2035 or 2040 or so on" edicts have "kick the can down the road" written in massive font size 1,000 written all over them. We'll be on gas for a while longer - just continue to eke more mpg out of what we have.All that being said, if they were to put the turbo Skyactiv-G engine in the MX-5 for 2024 and make it a Mazdaspeed model, I'd put a deposit on it right now. I love mine, but if it gets bumped up from 181hp to 250-275hp, it would be a flat out riot to drive.