Study: U.S. Auto Dealerships Saw 13% Rise in New Vehicle Sales in 2023

Urban Science in Detroit, an automotive retail-consulting firm, has issued its 2023 year-end Automotive Franchise Activity Report (FAR), which shows strong sales for new cars last year.
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Car dealership
Urban Science in Detroit reported new car dealerships saw sales rise 13 percent to 15.5 million units in 2023 and predicts 2024 will see even better numbers. // Stock photo

Urban Science in Detroit, an automotive retail-consulting firm, has issued its 2023 year-end Automotive Franchise Activity Report (FAR), which shows strong sales for new cars last year.

The study reveals dealers saw a 13 percent rise in new-vehicle sales (15.5 million units sold), primarily driven by non-retail sales. And as of Dec. 31, 2023, there were 90 more dealerships (rooftops) in the U.S. compared to year-end 2022 (18,347 in 2023 compared to 18,257 in 2022).

The number of franchises — brands a dealership sells — decreased from 31,554 in 2022 to 30,504 at year-end 2023 (a year-over-year decrease of 1,050 franchises).

The study also showed annual dealership throughput — the number of vehicles a dealership sells — rose from 759 in 2022 to 851 in 2023 (an increase of 92 units). This was the highest level the U.S. automotive retail dealer network has achieved since the arrival of the COVID-19 pandemic and subsequent chip shortage.

Based on a 2024 sales forecast of 16.1 million units by GlobalData, Urban Science projects the number of vehicles a dealership sells this year to rise to 880 units — a new post-pandemic record.

According to the 2023 year-end FAR, 96 percent of core-based statistical areas (CBSAs) in the U.S. had virtually no net change (+/- one store) in dealerships. About 86 percent of CBSAs had no actual net change in dealerships; 4 percent of CBSAs (net) lost at least one store, and 10 percent (net) gained at least one store.

The most significant state-level changes were net increases in California (+31), Texas (+18), and Florida (+15), and net decreases in New York (-6), Nebraska (-4), Virginia (-3) and Illinois (-3).

“As the automotive industry continues to transform at a record pace, it’s critical automakers tap the power of industry sales data updated daily to understand and anticipate the wide-ranging and quickly changing needs and behaviors of their customers and prospects,” says Mitch Phillips, director, global data, Urban Science.

“Preparing to optimally sell and service EVs with a strong base of ICE vehicles still on the road requires high-stakes decision-making that should be rooted in science, not speculation, to help manufacturers and their retailers better compete and achieve sustainable efficiency and profitability during the next 10 years and beyond.”