Dealers on the Ward's Dealer 500, an annual ranking of the top U.S. dealerships, have set a torrid pace the last few years. From 1997 to 2000, those dealers increased their total revenue for an incredible average of $10 million a year per dealership — from $91 million in 1997 to $121 million in 2000.

In 2001, the pace slowed. Last year, the Ward's 500 generated $62.4 billion of total revenue — up from $60.5 billion in 2000. Total revenue per dealership, though, increased only about $3.8 million to $124.8 million — still a phenomenal increase. Compare that to data from the National Automobile Dealers Association (NADA) in which the nation's 21,600 new car dealerships averaged $31.6 million in total revenue.

“It's been a good run,” acknowledges Bill Heard, whose Texas-based Landmark Chevrolet was one of seven stores in 2001 to pass the $300 million mark in total revenue. “Of course, it hasn't always been this good. The ups and downs used to be terrible,” says Heard, who's seen at least five recessions — three of which he says were tough.

Growth brings challenges though, says Greg Penske, owner of the top-ranked Longo Toyota.

He says, “There has been so much growth the past few years that the question becomes ‘How do we handle that growth efficiently without losing customers to our competitors?’ Facilities and capital expenditures can become big issues.”

Again, as in previous years, new-car sales revenue saw the biggest increase per dealership — $77.7 million in 2000 to $80 million in 2001. As a group, the Ward's 500 sold 1,549,276 new vehicles in 2001 — 6,000 more than in 2000. That works out to about 9.1% of the total new vehicle sales sold in the U.S. last year.

Each department showed consistent growth maintaining the same percentage of total revenue as in 2000. New-car sales generated an average of $80 million — good for 64.1% of the total revenue while used car sales accounted for 20.4% of the revenue total.

The Ward's 500 relied more on new-car sales revenue than did the average dealer according to NADA data. In 2001, the average dealership saw its new-vehicle sales generate 59.4% of its total revenue.

“Typically, new-car sales will make up a bigger portion of total revenue in the bigger dealerships,” Says Paul Taylor, NADA's chief economist. “They usually have proportionately smaller used-car operations.”

The back end departments (service, body shop and parts and accessories) brought in approximately 12% of the Ward's 500's revenue.

Revenue from the used-car operations and the parts and service departments may increase in 2002 as dealers begin seeing the fruits of the manufacturer warranty programs and certified pre-owned programs, says Taylor.

The 20 Mercedes-Benz dealerships on the list again led all franchises in average revenue per store with $149.8 million. Fletcher Jones Motor Cars in Irvine, CA led the charge for Mercedes bringing in $403.1 million in total revenue — almost twice as much as the New Jersey-based Ray Catena Mercedes store which generated $235.6 million.

Despite last year's well-publicized problems of Ford Motor Co. the 122 Ford stores on the Ward's 500 (down from 138 last year) actually increased their average of total revenue from $124.2 million in 2000 to $127.4 million in 2001.

2001 Ward's Dealer 500 Highlights

  • Longo Toyota becomes the first dealership to break the $500 million mark.

  • Forty dealerships exceeded $200 million in total revenue.

  • A record number 301 stores exceeded $100 million in total revenue.

  • The threshold for making this year's Ward's Dealer 500 was $75.9 million.

  • Ford continues to lead in the number of dealerships - but that lead is dwindling - 122 stores compare to 138 last year.

  • Chevrolet increased its number of dealerships on the list from 85 to 96. Toyota also increased its total to 75 - up from 65 in 2000.

  • AutoNation Inc. placed 93 stores on the list — down from 96 in 2000.

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