DETROIT (Bloomberg) -- U.S. auto sales per dealership may return to levels reached before the recession after General Motors Co. and Chrysler Group LLC closed locations.
Sales per dealer may rise to about 745 new vehicles this year, according to auto-dealership consultant Urban Science. The National Automotive Dealership Association forecasts total U.S. sales in 2011 may rise 11 percent to 12.9 million, which would be about 23 percent below the annual average from 2000 to 2007.
The number of U.S. auto dealerships fell 4.4 percent last year to 17,659, Detroit-based Urban Science said today in its annual Automotive Franchise Activity Report. The rate of closings slowed from 8 percent in 2009, according to the report.
“The domestic consolidations worked and have allowed the remaining dealers an opportunity see their numbers rebound faster,” John Frith, vice president of Urban Science, said in a statement.
GM, the largest U.S. automaker, and Chrysler eliminated more than 2,200 dealers as part of their bankruptcy reorganizations in 2009. The shutting of about one-fourth of the companies’ dealerships drew criticism by the special inspector general for the Troubled Asset Relief Program, which said in a report last year that the “dramatic and accelerated” closings may not have been necessary and added to unemployment.
More closings expected
GM reorganized with $49.5 billion in government aid, while Chrysler received
$12.5 billion in assistance for its reorganization that year from the government’s TARP program, which also aided banks.
Of the 822 dealerships that closed last year, almost all were either GM and Chrysler stores in arbitration following the automakers’ bankruptcies, or retailers of Ford Motor Co.’s discontinued Mercury brand, Frith said.
About 53 percent of Mercury franchises closed by the end of last year, and Ford plans to shut the remaining 819 outlets, Frith said today.
Ford also plans to reduce the number of dealerships selling its Lincoln luxury brand in the biggest U.S. metropolitan markets by 25 percent to 325 outlets, the automaker said this month at the NADA convention in San Francisco.
Ford ended last year with 3,131 franchises selling its namesake brand, surpassing GM’s top-selling Chevrolet brand, which had 3,084, for the first time, Frith said.
New brand entries
While new entries by brands such as China’s BYD Co. and India’s Mahindra & Mahindra Ltd. are “certainly coming,” they’re unlikely this year, Frith said.
“I would be very surprised if they don’t have a presence here in the next 10 years,” he said. “Timing is a guess at this point. There’s a lot of hurdles for a brand to enter the U.S. with certification and setting up dealer networks.”
Automakers such as Shenzhen-based BYD or Mahindra, based in Mumbai, may enter the U.S. market by purchasing other brands, similar to the way China’s Zhejiang Geely Holding Co. bought the Volvo Cars unit from Ford last year, Frith said.
The U.S. auto industry averaged a 16.8 million annual selling rate from 2000 to 2007, according to Autodata Corp. The U.S. is the world’s second-largest auto market, trailing China in each of the past two years.
Sales per dealer may rise to about 745 new vehicles this year, according to auto-dealership consultant Urban Science. The National Automotive Dealership Association forecasts total U.S. sales in 2011 may rise 11 percent to 12.9 million, which would be about 23 percent below the annual average from 2000 to 2007.
The number of U.S. auto dealerships fell 4.4 percent last year to 17,659, Detroit-based Urban Science said today in its annual Automotive Franchise Activity Report. The rate of closings slowed from 8 percent in 2009, according to the report.
“The domestic consolidations worked and have allowed the remaining dealers an opportunity see their numbers rebound faster,” John Frith, vice president of Urban Science, said in a statement.
GM, the largest U.S. automaker, and Chrysler eliminated more than 2,200 dealers as part of their bankruptcy reorganizations in 2009. The shutting of about one-fourth of the companies’ dealerships drew criticism by the special inspector general for the Troubled Asset Relief Program, which said in a report last year that the “dramatic and accelerated” closings may not have been necessary and added to unemployment.
More closings expected
GM reorganized with $49.5 billion in government aid, while Chrysler received
$12.5 billion in assistance for its reorganization that year from the government’s TARP program, which also aided banks.
Of the 822 dealerships that closed last year, almost all were either GM and Chrysler stores in arbitration following the automakers’ bankruptcies, or retailers of Ford Motor Co.’s discontinued Mercury brand, Frith said.
About 53 percent of Mercury franchises closed by the end of last year, and Ford plans to shut the remaining 819 outlets, Frith said today.
Ford also plans to reduce the number of dealerships selling its Lincoln luxury brand in the biggest U.S. metropolitan markets by 25 percent to 325 outlets, the automaker said this month at the NADA convention in San Francisco.
Ford ended last year with 3,131 franchises selling its namesake brand, surpassing GM’s top-selling Chevrolet brand, which had 3,084, for the first time, Frith said.
New brand entries
While new entries by brands such as China’s BYD Co. and India’s Mahindra & Mahindra Ltd. are “certainly coming,” they’re unlikely this year, Frith said.
“I would be very surprised if they don’t have a presence here in the next 10 years,” he said. “Timing is a guess at this point. There’s a lot of hurdles for a brand to enter the U.S. with certification and setting up dealer networks.”
Automakers such as Shenzhen-based BYD or Mahindra, based in Mumbai, may enter the U.S. market by purchasing other brands, similar to the way China’s Zhejiang Geely Holding Co. bought the Volvo Cars unit from Ford last year, Frith said.
The U.S. auto industry averaged a 16.8 million annual selling rate from 2000 to 2007, according to Autodata Corp. The U.S. is the world’s second-largest auto market, trailing China in each of the past two years.
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