Report: U.S. Dealerships Decline, Car Sales Decrease

While there are 34 fewer dealerships in the U.S. as of July 1, the decrease is small and indicates continued stability overall, according to the Mid-Year 2020 Automotive Franchise Activity Report released today by Detroit-based Urban Science.
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The number of dealerships in the U.S. has decreased but is stable overall, according to Urban Science. // Stock photo

While there are 34 fewer dealerships in the U.S. as of July 1, the decrease is small and indicates continued stability overall, according to the Mid-Year 2020 Automotive Franchise Activity Report released today by Detroit-based Urban Science.

As of July 1, there are 18,161 dealerships across the country, a 0.2 percent decrease from 18,195. The number of franchises, or brands a dealership sells, also experienced a period of stability, decreasing slightly from 32,185 to 32,031 since the beginning of the year.

“Since 2010, the dealership network has set a new normal pattern of stability,” says Mitch Phillips, global director of data for Urban Science. “The data shows that 98 percent of local markets had virtually no net change (+/- one dealership). That said, the most significant net dealership decreases occurred in California and New York at seven dealerships each, and Iowa at five dealerships.

“Increase in net dealership count was low, but the most significant increases occurred in Florida with seven dealerships, and Illinois and Washington with three dealerships each. An interesting observation is that Texas is now missing from the most active states because, typically, they are on that list for adding the most dealerships.”

Average dealership throughput is forecasted to fall to 734, a decrease of 206 units from 2019. Along with the largest total dealership decline, California and New York saw the largest decline in total sales volume.

“Sales throughput for dealers is defined as the number of sales divided by the dealer count,” Phillips says. “With this current stable dealer count, the throughput statistic is controlled by the sales volume, which is currently forecasted to decline in 2020 by around 20 percent. Sales throughput should fall 206 units to 734 per store based on 2020 sales forecasts.”

A recent Harris Poll COVID-19 tracker, however, shows that pent up demand for buying a car once things return to normal and businesses reopen has increased since the end of March (11 percent) compared to the end of May (19 percent), Urban Science says.

Urban Science maintains a list of current vehicle dealership and franchise information for all car and light truck brands in the U.S. It is compiled on a monthly basis, and the data comes from a variety of sources, including from automotive manufacturers and phone and field verification. Urban Science has been collecting this information since 1990 and compiles an annual analysis for the previous year in its Automotive Franchise Activity Report.

The company was founded in 1977 and is a global retail consulting firm. It has offices in the U.S., Spain, United Kingdom, Germany, Italy, France, Australia, China, Mexico, Russia, Japan, India, and Brazil.

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