NADAs annual industry DATA Report documents the elements of recession, recovery, and enormity of dealership sales in the economy
The National Automobile Dealers Association recently released NADA DATA 2010, their annual comprehensive report on auto retailing, which analyzes the state of the U.S. car and truck industry, with specific emphasis on the retail side of the business. Based upon a years worth of data and trends, the report includes findings on new and used light vehicle sales; financing and service contracts; fixed operations; employment and payroll; advertising, and consumer credit.
The 2010 report enumerates the factors and complexities underlying the Great Recession and the beginning of the economys recovery in 2009, starting with the dramatic drop in new vehicle sales from 13.2 million in 2008 to 10.4 in 2009.
The recession and decrease in sales of new vehicles also helps to explain the 6.9% decrease in dealership service and parts business. However, despite the drop in service sales, amidst increasing market pressure from independent repair shops, dealers were still able to remain competitive and attract customers with compelling prices and upgraded facilities.
On a positive note, dealer sales still made up a significant percentage of the total U.S. retail sales at 13.2%, particularly when taking into consideration the small proportion of total retail establishments that dealerships comprise. On the state level, Maryland and Virginia dealers had comparatively respectable percentages of total retail sales at 14.5% and 12.5%, respectively. Metropolitan area markets, like Washington, were not broken out in the report, although it is safe to say that the Washington Region is one of the strongest vehicle markets in the country.
Another positive finding in NADA Data was that auto dealerships remain a significant employer in thousands of communities across the country. The payroll for all new-car dealerships was nearly $44 billion, and represented about 13 percent of the nations total retail payroll, noted Paul Taylor, NADA chief economist. New-car and-truck dealers are significant contributors to their local economies, tax bases and civic and charitable organizations. New-car and-truck dealerships on average employed 49 people, with an annual payroll of about $2.4 million in 2009, according to the report.
An interesting analysis of dealership advertising in the report found that over the last decade, the distribution of advertising expenditures has greatly changed, due in large part to the explosion of the Internet. In 1999, dealers allocated 51.9% of ad money to newspapers, and only 4.8% to the Internet. By 2009, expenditure distributions changed drastically, with newspapers no longer holding a majority of ads, but rather dropping to 22.4% while the Internet rose to 22.2%.
To learn more about the state of the industry click here for the full report.
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