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Wednesday, 18 August 2021 20:13

California Truly Now a Golden State for Dealership Growth

Written by Auto Remarketing Staff

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When Urban Science released statistics and insights from its 2021 Mid-Year Automotive Franchise Activity Report (FAR), analysts said “an interesting observation is that California has returned to the list of most active states adding the dealerships.”

The report indicated a small uptick in dealership rooftops nationwide and an increase in sales throughput. But it’s the rise of 24 dealerships arriving on the scene in the Golden State that triggered the reaction from Urban Science on Aug. 18.

 

As of July 1, Urban Science said there are 46 more dealerships (rooftops) in the U.S., taking the Jan. 1 count of 18,157 up slightly to 18,203. This 0.3% increase is small and indicates continued stability overall, according to the report.

 

This movement is in contrast to the slight decline Urban Science saw for dealerships in 2020 and is back to the same level of 2019.

 

Analysts added in a news release that the number of franchises, or brands a dealership sells, also experienced a period of stability, slightly decreasing from 31,959 to 31,932.

 

“Sales throughput for dealers is defined as the number of sales divided by the dealer count,” said Mitch Phillips, Urban Science’s global director of data. “With the current range of 2021 sales forecasts being slightly more than 2020 and a stable dealer count, throughput is forecasted to increase around 103 units to 910 units. This is about the level we saw in 2013.”

 

A recent Urban Science online study supports this forecast, finding that, despite the rise in COVID-19 cases across the U.S., consumers are becoming increasingly comfortable with visiting a dealership in-person, with 64% reporting they believe it is...


...“completely safe to go to a dealership today” and 42% are “comfortable visiting a dealership within the next month or sooner.”

 

When looking at the demographics, Urban Science indicated four in 10 adults living in urban areas report they’ll buy within the next year---twice as many as those in suburban and rural areas.

 

“Since 2010, the dealership network has set a new normal pattern of stability,” said Phillips, who added the data shows 98% of local markets had virtually no net change.

 

The report went on to note the most significant (net) dealership changes occurred in the following states:

 

  • California: +24 dealerships
  • Texas: +8 dealerships
  • New York: +5 dealerships
  • Illinois: -2 dealerships
  • Kansas: -2 dealerships
  • Tennessee: -4 dealerships

 

We thank Auto Remarketing for reprint permission. 

 

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