Auto dealers have returned to profitability and stability, and the average number of vehicle sales at each dealership is expected to reach an all-time high in 2012, according to projections released this morning by Detroit-based Urban Science.
After a major reduction in dealerships during the auto crisis in 2008 and 2009, the industry has stabilized.
The average dealer is expected to sell about 805 vehicles in 2012, up from 719 in 2011 and an all-time low of 513 in 1991.
"That's really good news for the dealers and the industry in total," said John Frith, vice president for retail channel solutions at Urban Science. "It really looks like we're going to hit a record this year."
Urban Science is a retail consulting firm that works with auto dealers to help them choose locations where they are likely to make the most profit and use practices that satisfy most customers.
Some dealers are thriving in part because they survived the cuts enacted by General Motors and Chrysler during their 2009 bankruptcy restructurings.
The U.S. had 17,770 dealerships at the end of June, virtually unchanged from the end of 2011. Saab, a former GM brand, has closed 59 standalone dealerships this year. That included four in Michigan, which lost 10 dealerships overall during the first six months of the year.
Frith said the market seems to be "settling in" at about 17,770 dealerships after an average annual decline of 2.5% since 1990.
Dealers cut 147 "franchises," or brands, in the first six months of the year, reflecting a 1% decline, Urban Science reported. Discounting Saab, U.S. dealers added about 40 brands.
"Saab's the big one down," Frith said.
U.S. vehicle sales are expected to be about 14.1 million to 14.4 million in 2012.
In China, where vehicle sales are expected to hit about 19.5 million for 2012, the average dealer is expected to sell about 980 vehicles, said Hamilton Gayden, Urban Science's managing director in China. Gayden said customer service at Chinese dealerships is starting to suffer.
"The sales network in China is at a crossroads," he said.
Despite continued sales growth, many Chinese dealers are reporting excess inventory, a sign that the market may be softening.
"It's a big challenge for the dealers right now," Gayden said. "Their margins are eroding very quickly."