It might be safe to announce the auto industry has fully recovered from its bottom-out in 2009. Vehicle sales at U.S. dealerships are on track to set a record for the second year running, according to a report from Wards Auto.
If vehicle deliveries reach 15 million in 2013 then the average sales per dealer will increase to 839 units, up from last year's record of 812 vehicles per dealership.
Prior to 2012, the all-time high went untested for eight years, when U.S. vehicle sales was 784 per dealership in 2005, the report stated. Wards Auto analysis predicts total U.S. sales will reach 15.3 million units, compared to 14.4 million sold in 2012.
Average sales per dealer, called throughput, is an important gauge of industry profitability. The low point for throughput was in 1991 when 24,200 U.S. auto dealers sold an average of 513 vehicles.
The number of auto dealers in the U.S. has declined since then. Numbers fell by about 4,400 2008 and 2009 when the industry bottomed out and General Motors and Chrysler consolidated their retail networks as part of bankruptcy reorganization plans, according to Wards Auto.
As of January the U.S. had 17, 851 auto dealerships, a half percent increase from the same time last year, the report stated.
"In the past, a 2% dealership annual decline was considered normal," John Frith, vice president-retail solutions for consultancy Urban Science, said, according to Wards Auto. "But barring unexpected economic changes, network growth of 0.1% to 0.2% will become the new benchmark for the next few years."
Texas and California had the highest increases in new dealerships last year, with 25 and 24 new operations, respectively.
States with the most dealership declines were Georgian, Michigan and Tennessee, with 10, nine and six lost dealerships, respectively.
"While there are fewer dealerships today than a decade ago, they are larger and should be able to easily manage the increased sales and throughput," Firth said.
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