DETROIT — Urban Science recently released midyear statistics and insights from its Automotive Franchise Activity Report (FAR), which shows the dealership network has grown in 2011 for the first time in 10 years by .4 percent. The midyear 2011 Franchise Activity Report also showed an increase in throughput and sales, indicating dealers are in financially stronger positions than they were at the close of 2010.
At the beginning of July 2011, there were 17,725 dealerships, an increase of 66 over year-end 2010. However, the number of franchises — the brands that a dealership carries — has decreased by 729 franchises as of July 1, 2011, bringing that total to 29,360. This is due largely to the wind-down of the Mercury brand at Lincoln dealerships. This drop in franchises represents a major stabilization of the industry, following the wind-down of 4,897 franchises in the 2009–2010 calendar year.
“The small but unusual bump in the number of dealerships can be attributed to market corrections as the automakers rearrange stores following a couple tumultuous years of network consolidation and dealership bankruptcies,” said John Frith, vice president of retail channel solutions at Urban Science. “The good news is that as auto sales have increased, dealer throughput has increased by just under 8 percent, putting dealers in a better financial position to handle the current economic uncertainty.”
Throughput at dealerships has risen to an average of 711 per dealership, an increase from 656 vehicle sales per dealership in December 2010. Average throughput is based on sales of 12.6 million units.
“The midyear numbers illustrate a healthy, stabilized dealership network,” added Frith. “We expect a return to the long-term trend of a slow decline in the size of the network as the dealerships themselves become bigger with more franchises under one roof. We’re not expecting to see any more big closures. Dealers are more efficient than ever and have learned to weather the downturns.”
About the Automotive Franchise Activity Report
Urban Science maintains a list of current new vehicle dealership and franchise information for all car and light truck brands in the United States. Compiled on a monthly basis, the census is the most reliable source of dealership statistics. The data comes from a variety of sources, including feeds from automotive manufacturers as well as phone and field verification. Urban Science has been collecting this information since 1990 and compiles an annual analysis available every February for the previous year in its annual Automotive Franchise Activity Report.
About Urban Science:
Founded in 1977, Urban Science is a global retail consulting firm that takes a scientific approach to help companies identify where they should allocate resources in order to increase their market share and profitability in the most effective and efficient manner. With headquarters in Detroit, Urban Science serves its global clientele from offices in the United States, Spain, UK, Germany, Italy, France, Australia, China, Mexico and Japan. For more information on Urban Science, visit www.urbanscience.com.