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Sales, jobs and optimism rise at new-car dealers

June 12, 2012|By Jerry Hirsch
  • Shoppers look over a row of 2012 Ford Focus vehicles at the Uftring Automall in East Peoria, Ill.
Shoppers look over a row of 2012 Ford Focus vehicles at the Uftring Automall… (Bloomberg )

New-car dealers are adding workers, opening more stores and expressing general optimism about their business, according to an annual report released this week by the National Automobile Dealers Assn.

There were 933,500 workers employed at U.S. new-car and -truck dealerships in 2011, a 4.6% increase from the previous year, said Paul Taylor, chief economist of the trade group.

The number of dealerships, which has declined dramatically in recent years, has started to climb, growing by about 66 on a net basis to about 17,600.

Still that’s down from more than 21,000 prior to the recession and the recent U.S. auto industry restructuring. California has 1,307 new-car dealerships, more than any other state.  Texas is second with 1,178.

 “The arrival of new brands and new dealerships is a sign that even more vigorous competition is on the way in the U.S. vehicle marketplace,” Taylor said. "As new brands enter the U.S. market, the net dealership count may increase in future years of strong economic growth."

In 2011, the average new-car dealership employed 53 workers and had an annual payroll of $2.6 million. New-car dealers employ more than 95,000 workers in California, amounting to annual payroll of more than $5 billion.

Average dealership sales rose 12.3% last year to about $35 million.

Only 8% of dealers surveyed in March of this year expected their profits to decline in 2012. That reflects a general optimism in the industry. Only last year, when the figure was at 6.7%, did fewer car dealers expect profits to decline at any time in the past 10 years.

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