Store count is down first time since '13

The number of U.S. dealerships declined for the first year since 2013, though by just 0.3 percent, while industry sales throughput increased slightly, Automotive News' annual dealership census found.

The dealership count fell by 52 stores to 18,275 as of Jan. 1, while the number of new-vehicle franchises also dipped, by 0.5 percent, or 172 franchises, to 32,099. Slightly lower General Motors and Ford Motor Co. dealership and franchise counts largely contributed to the declines.

Fiat Chrysler Automobiles added nine dealerships last year, and its overall franchise count also grew beyond Jan. 1, 2018, estimated figures. FCA spokesman Jeff Bennett said the automaker has been working with dealers to add standalone Jeep and Ram stores, including one Ram and 12 Jeep locations that opened last year.

That initiative launched in late 2017 to create a unique customer experience for buyers of vehicles from those brands. The 2018 standalone additions came from existing franchises pulled out of Chrysler-Dodge-Jeep-Ram dealerships to their own buildings, Bennett said. The company aims to increase those figures by another 50 to 60 standalone showrooms by the end of 2019.

Across the industry, exclusive franchise outlets increased last year by 34 to 11,960 franchises. Import-only exclusives continue to rise, up 20 from a year ago, while import-only dualed stores dropped by 38.

With a small dip in franchise count and a 0.2 percent drop in U.S. light-vehicle sales, excluding Tesla, in 2018, average industry throughput increased 0.2 percent from a year ago to 533 vehicles per franchise. Industry sales, including Tesla, were 17.3 million, the fourth-highest on record.

The census ranks 42 brands for throughput — a key metric indicating brand health — and found 13 gained position last year, 13 lost ground and 16 remained unchanged in the rankings. Brands strive for gains, as stores are likely to be more profitable when more vehicles are sold through the same number of dealerships.

The top four finishers — Toyota, Honda, Lexus and Nissan — all saw declines last year. Longtime throughput leader Toyota recorded sales of 1,718 vehicles per franchise on average, down just 0.1 percent. Lexus rose a spot to No. 3, while Nissan dropped a spot to No. 4 as its throughput slipped by 6.8 percent on average. While Nissan shed five franchises, its sales dipped 6.6 percent.

Subaru, which again came in fifth, was the lone brand in the top five to see an increase. Its throughput jumped 4.9 percent last year as its franchise count rose by one. Sales for the popular brand rose 5 percent to 680,135 vehicles, setting a record for the 10th straight year, according to the Automotive News Data Center. Subaru aims to sell 700,000 vehicles this year and also plans to add three dealerships in 2019, Subaru spokeswoman Diane Anton said.

Rounding out the top 10 were Mercedes-Benz, BMW, Hyundai, Ford and Kia. Korean brands made gains, as Kia jumped from 11th to 10th and Hyundai moved to eighth from ninth. Both brands dropped a handful of franchises last year.

Ford, the lone domestic brand in the top 10, slipped one spot into ninth as throughput fell 2 percent. It dropped 14 franchises, and sales fell 3.3 percent in 2018.

Jaguar Land Rover, up 16 franchises last year — six Jaguar and 10 Land Rover — had mixed throughput, with Land Rover's number rising 19 percent on a sales increase of 23 percent. Meanwhile, throughput for Jaguar fell 25 percent as sales for the sedan-heavy brand sank 23 percent.

A Jaguar Land Rover spokesman said the brands have small growth plans but would not say how many stores the automaker may add.

Volvo saw a 21 percent gain in throughput. Volvo sales rose 21 percent, while its franchise count was reduced by five. More store cuts are coming.

"Retailer throughput and profitability has been a key strategic focus in our transformation and we are making good progress, but we have more to do," Anders Gustafsson, CEO of Volvo Car USA, said in a statement. "We expect to reduce our store count a bit and will take opportunities to consolidate where that makes sense for us and the parties concerned."

Retail consulting firm Urban Science, of Detroit, which released its own automotive franchise study in February, found throughput on a per-dealership basis rose by one unit last year to an average of 948 vehicles.

Mitch Phillips, global data director for Urban Science, expects throughput to drop about 2.5 percent in 2019 as new-vehicle sales are predicted to fall.

LMC Automotive expects U.S. light-vehicle sales of around 17 million this year, as long as there is no meaningful tariff impact. Cox Automotive predicts sales of 16.8 million vehicles, while Edmunds has a 16.9 million forecast.

While 96 percent of local markets had no net changes in the number of dealerships last year, Urban Science found some states had gains. Texas added the most dealerships last year, gaining 24, followed by Florida, Minnesota, Georgia, Louisiana and Ohio.

Surprisingly, Phillips said, New York and California were not on the list of gainers.