DETROIT -

Though the number of franchised dealerships has declined slightly this year, it seems the dealerships that have stuck around are on track to break records and reach an all-time high for average new-vehicle sales per dealership, according to the mid-year Automotive Franchise Activity Report from Urban Science.

Healthy sales this year for franchised dealerships has put the group on track to reach a throughput — or average number or sales per dealership — of 877 units in 2013. This number is based on projected new-vehicle sales of 15.6 million, which has been forecasted by LMC Automotive.

“This extends an unprecedented three-year throughput increase to four years and further heightens dealership profitability,” Urban Science reported.

But as throughput is set to break records for the fourth year in a row, Urban Science predicts that increases may slow in the future.

“Automakers are keeping their retail networks stable even as sales continue to rise, creating a tremendous opportunity for dealerships to reap the benefits of the industry’s most profitable periods in two decades,” said John Frith, vice president at Urban Science.

“While throughput levels are on track to crush last year’s all-time high, we believe we’re hitting the top of the curve. If we follow historical trends, throughput increases should slow in the next year or two before they start a mild decline.”

And as average sales per dealership rise, there has been a slight declines in the number of franchised dealerships in the U.S. since last year. As of the beginning of July, Urban Science data shows there were 17,780 franchised dealerships in the country, representing a 0.4-percent decrease from last January’s total of 17,851 — perhaps a result of manufacturers trying to stabilize their networks.

Also a factor behind the slight drop, according to the report, is the loss of the Suzuki brand, with resulted in the closure of 222 franchises, including 125 stand-alone dealerships.

The loss of the Suzuki brand also contributed to the 0.6-percent drop in the number of brands a dealership sells, which dropped from 31,608 franchises on Jan. 1 to 31,409 as of July 1.

“The rest of the network generally remained healthy and grew slightly since the beginning of the year; 97 percent of markets remained stable and experienced virtually no net fluctuations since the end of 2012,” officials said.

Breaking the dealership closures down by state, the most net dealerships declines were seen in New Jersey, who had eight closures. Following closely behind were Missouri and Pennsylvania (seven dealerships each); and Florida, Indiana, Maryland, New York and Washington (six dealerships each).

On the other hand, California had the most dealerships added, with 20 new openings.

Texas added four dealerships and Arkansas, Louisiana, Nevada and Tennessee added two each, according to the report.

 

Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.