Dealership Throughput Expected to Slip for Third Year in a Row

Matt Posky
by Matt Posky

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

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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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?

  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
  • Oberkanone Where is the value here? Magna is assembling the vehicles. The IP is not novel. Just buy the IP at bankruptcy stage for next to nothing.
  • Jalop1991 what, no Turbo trim?
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