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Five years after the worst economic downturn in recent memory, the 500 dealerships that make up the 27th annual list recorded sales of $50.3 billion based on total revenue, up 11% from $45.4 billion in 2012.
“We’re doing this differently,” says Battaglia.
As an elite part of the nation’s nearly 18,000 dealerships, the WardsAuto Dealer 500 reflects an overall industry that is becoming more confident, profitable and customer-centric.
Five years after the worst economic downturn in recent memory, the 500 dealerships that make up the 27th annual list recorded sales of $50.3 billion based on total revenue, up 11% from $45.4 billion in 2012. Total unit sales rose 13% to 1.5 million from 1.4 million in 2012.
These results generally reflect improved conditions at many U.S. dealerships. An analysis by the National Automobile Dealers Assn. shows total average sales for U.S. dealers were $9.7 million in the first three months of 2013, up 5.1% from $9.2 million in the same period last year.
says average new-vehicle sales were up 8.9% in the first quarter to $5.5 million, with the average new vehicle selling price rising 3.4% to $31,307.
Net dealership profit before taxes in the first three months decreased 0.2% to $229,365, due largely to narrowing margins, higher-than-anticipated costs and a slight softening of the market in that period.
“It was regrettable that taxes were increased in the first quarter, but the general sales climate is strong,” saysChief Economist Paul Taylor. “With interest rates at a level last enjoyed when Harry Truman was president and the average car over 11 years old, customers are actively engaged in the marketplace.”
Taylor predicts new-car sales of 15.4 million this year. WardsAuto forecasts 15.3 million units this year, 15.4 million if there’s heightened fourth-quarter sales activity. That could come from an increase in pickup sales outpacing the general market.
Most interviewed dealers on the WardsAuto Dealer 500 agree 2013 is a good year to be in the car business. Those whose stores are not yet performing at desired levels are cautiously optimistic and making investments to strengthen their operations.
“I feel very good about the industry coming back overall,” says Tim Michael, president of Capital Automotive Group and dealer principal of Capitalin Raleigh, NC, No.19 in this year’s ranking with $196 million total revenue.
The store is tracking up to $200 million for all of 2013. “Attitudes are very good here, traffic has picked up, phones are ringing a lot more now than they have in the past,” he says.
With 290 employees, Capitalsells about 750 new and used vehicles a month, including 150 fleet sales to government and businesses in Raleigh-Durham’s vibrant Research Triangle region.
“Our business was 30% commercial, but that really shut down around October 2008,” Michael says. “It seems to be growing again. In the past six months in this area, construction has come back, there are a lot of apartments and condos being built and plumbers, electricians and painters seem to be getting back into it.”
To maintain margins and profitability, Michael’s team works to keep costs down. “We have expense meetings weekly with different departments,” he says. “As 2008 came around, we all had to learn how to tighten things up a little bit.
“CarMax is here and they are very competitive. We work hard to make sure we hire the right people from the beginning and that we support each other. There are no superstars here; everybody works hard together.”
Capital Automotive Group holds 10 franchises in the Raleigh area. “We added a Subaru franchise in another market this past month,” Michael says. “Two months before that we purchased another Ford store. As long as we can support that growth with the right people, we want to continue to grow.”