By on February 13, 2018

cars dealer dealership, Image: HappyAlex/Bigstock

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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12 Comments on “Dealership Throughput Expected to Slip for Third Year in a Row...”

  • avatar

    Hence the two letters from separate dealers wanting me to “swap” keys with my 2014 Impala. Hurry so we have enough cars for the President day sale.

  • avatar
    Felix Hoenikker

    Every time I take my low mileage 2014 Accord to the local Honda dealer for service, I get phone calls and emails begging me to trade it for a new one. About the worst financial decision you could make is to trade in a perfectly good four year old car for a new one. Since I’m sort of retired, financial decisions rule.

    • 0 avatar

      I can do you one better. The stealership that I purchased a car from last year, called me this weekend to see if I wanted to trade it in. I had to laugh, why would I do that if I liked the car? And if I didn’t, why would I go back for another?

      The salesman assured me that many people do this because of the great promotions that they are offering. What a joke.

      • 0 avatar

        Ryannosaurus, there really are a number of people who do just that, trade off a vehicle they purchased outright after 1, 2 or 3 years.

        It works out fairly well for individuals who do not finance the purchase, and often it is cheaper than a lease.

        Many older people, 55 and over, and/or those financially secure, do this more than younger people; or they lease a brand new vehicle every 3 yrs.

        It all depends on what works for them.

    • 0 avatar

      I’ve been getting letters from Toyota dealer, where I take my Highlander for recalls, for at least 6 years. They will give me $10 Target gift card just to attend. Same with my local Dodge-Jeep-Mitsu-Fiat-VW-Alfa-Ram dealer. They also have been hunting my Highlander for 5 years or so. Each letter starts, “Dear buddy, there has been tremendous demand for 2009 Toyota Highlander…”

  • avatar

    “What do I have to do to put you in this car today?” I dunno, kill me and stuff my body into the trunk?

  • avatar

    I routinely get letters from the VW dealer telling me that they will offer a “special one time trade in deal” on my “2013 JETTA TDI SEDAN” that I sold back to VW a year ago. But I have to come in this weekend only! Hurry! This “special one time trade in deal” for my “2013 JETTA TDI SEDAN” is only for me, and only for this weekend!

    I seriously doubt it was better than the buyback deal from VW. Maybe there are still a few folks who don’t know about the buyback?

  • avatar

    I have to wonder if the so called “wealth effect” will nip the projected drop in the bud. People opened up there 401K statements in January and saw a fat jump over the last year. Then a few weeks later they notice a nice bump in their take home pay as the new tax rates kicked in. Put them together and maybe folks feel emboldened to treat themselves to a new ride. For the record I did not do this. Since the tax cuts for the average joe are grandfathered in the new bill I’m choosing to put the extra dough in my 401k. Color me shocked when congress cant be bothered to extend my rate cut in a few years.

  • avatar

    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.

  • avatar

    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.

    • 0 avatar

      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?

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