An overview of the auto retail industry

Recent years have seen a number of changes in the automobile retailing industry. The mid-1990's introduced large corporate industry consolidators, creating publicly traded mega-dealers. The overall number of dealerships has declined, but sales have increased and branched into related services such

On January 1, 2002 there were 21,800 new-car dealerships in the U.S., some 350 fewer than on the same date a year earlier and 450 fewer than two years earlier. The decline in the number of dealerships is nothing new and represented the 15th consecutive annual decline in the number of new-car dealerships since 1987. Today there are about 4,000 fewer new-car dealerships in the U.S. than there were 20 years ago.

While the number of dealerships has fallen by 4,000 in the last 20 years, the number of new cars sold annually has grown substantially from 10.9 million units in 1980 to 17.1 million units in 2001. What has changed markedly has been the number of cars sold per dealership as more cars are being sold by fewer dealers. Today almost 60 percent of all dealerships sell more than 400 cars annually while 20 years ago more than 70 percent of all dealerships sold less than 400 cars annually.