New-Car Dealers Employed More than 1M Last Year

McLEAN, Va. -- A rebounding economy and rising auto sales are prompting franchised new-car dealerships across the United States to hire both salesman and service technicians, the National Automobile Dealers Association reported Thursday. Employment at the dealerships surpassed one million last year after falling during the Great Recession.

New-car dealers employed 1.008 million in 2013, up 3.4% from 2012, NADA reported. NADA represents nearly 16,000 new-car and -truck dealerships with 32,000 domestic and international franchises.

New-car dealerships employed 57 on average and had an average payroll of $3 million in 2013, up 3%. Total payroll last year for all new-car dealerships was $53.7 billion.

"The economic recovery is continuing, and we expect a stronger housing market, improving job prospects and continued low interest rates for auto loans to boost sales this year," said NADA chief economist Steven Szakaly, in a prepared statement.

New-car dealerships on average had a net, pretax profit of 2.2% in 2013 -- unchanged from the previous year. As a percentage of total sales, the 2.2% figure represents sales in the new- and used-vehicle departments and sales of service and parts. New-car dealerships on average had a net, pretax profit of $923,248, up 10.5% in 2013. Total revenue at new-car dealerships reached $730 billion, an increase of 8.8%.

"Profitability at new-car dealerships remained flat in 2013," Szakaly noted. "Fierce price competition -- whether from online research, a network of competing franchised dealers or compelling new vehicles -- continues to dominate an industry with slim retailing margins."

Gross margins on sales of new cars and light trucks continued on a downward path in 2013, falling to 3.8% from the previous year.

Sales in the service, parts and body shop at new-car dealerships rose 4.8% in 2013. Warranty work performed by new-car dealers came to $14.4 billion in service and parts last year -- all at no cost to the customer.

New-car dealers spent $7.6 billion on advertising in 2013, up 6.1%. Dealerships on average spent 33% of their advertising budget on Internet ads, up from 26.5% the previous year. Television advertising accounted for 21% of dealership spending, a slight increase.

Published by The Business Journal, Youngstown, Ohio.
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