US car dealerships post record sales in 2012, thriving on stronger volume, more franchises
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Detroit Free Press - The number of car dealerships in the U.S. remained stable in 2012, but the volume per store set a record, according to data released Thursday by Urban Science, a Detroit-based retail consulting firm.

There were 17,851 dealerships in the U.S. in 2012, up 0.5% from the previous year's 17,767. The industry lost some Saab and Suzuki dealers, but that was offset by stronger overall sales, said vice president John Frith.

Most dealers who survived the downturn in 2009 are thriving.

Sales per dealership, known as "throughput," hit a record 812 in 2012, higher than projected and beating the 2005 record of 784 sales per dealership. Urban Science forecasts it will hit 839 this year.

Dealers are using the internet more to develop leads, using more efficient processes and offering better service resulting in faster flow with the same number of people and resources, Frith said.

The number of franchises grew to 21,139 from 18,130, largely because Chrysler dealerships added Ram as a separate brand from Dodge – adding 2,277 Ram franchises across the country. The number of former Saab dealers was 187.

Geographically, Texas is the growing fastest with 25 dealerships added last year while Georgia lost 10.

Michigan remains in the bottom five – since 2009 – with a loss of nine dealerships. On a bright note, Frith said Michigan lost 10 dealerships in the first half of the year – three were Saab franchises - but added one in the second half.

"The Michigan economy is improving and we're seeing an increase in car sales," Frith said. "The bleeding has stopped. Hopefully Michigan will not be in the bottom five again."

The consultants at Urban Science do not see any major shakeouts or downsizing of brands on the horizon.

Ford already phased out Mercury and consolidated Lincoln, which has 48 fewer dealerships.

General Motors and Chrysler purged in bankruptcy restructuring. Fiat dealerships are in place and these dealers will handle Alfa Romeo when it returns to the U.S.

Volkswagen wants to add dealers and Hyundai and Kia are expected to add a few more dealers, Frith said.

In other regions, the growth of franchises in China has slowed somewhat, increasing only 17% in 2012 to 21,139 compared with a 28% jump in 2011.

Firth said the market in China is starting to mature and there are not as many dealerships opening to sell small cars. The growth is a little more calculated and is centered on luxury brands and larger vehicles.

Growth has shifted to slightly smaller cities.

 

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