Profits flat at U.S. dealerships despite rising sales, according to The Detroit News.
Because of tough competition, profits at the nation’s 17,665 new-car dealers remained flat in 2013 despite rising auto sales.
As a percentage of total sales, profitability at new-car dealerships remained at 2.2 percent last year. “Fierce price competition — whether from online research, a network of competing franchised dealers or compelling new vehicles — continues to dominate an industry with slim retailing margins,” said Steven Szakaly, chief economist for the National Automobile Dealers Association.
The 2.2 percent figure represents sales in the new- and used-vehicle departments, and service and parts sales, the group said in a report. New-car dealerships on average reported a pre-tax profit of $923,248, up 10.5 percent in 2013. Total revenue at new-car dealerships reached $730 billion in 2013, an increase of 8.8 percent.