Nada Data 2010 f2
Nada Data 2010 f2
www.nada.org/nadadata
T
he nation’s franchised new-car dealers sold just 10.4 million new light vehicles in 2009, as the
recession deepened in the first half of the year. Sales were down dramatically from the previous year’s
13.2 million units. The good news? Used-car values increased as the shortage of used units started
to limit sales for used vehicles. The demand for used cars increased more quickly than the supply increased.
This shortage of used vehicles, along with other factors, contributed to higher second-half new-vehicle sales
and a V-shaped recovery of manufacturing in the United States. The typical dealership’s dollar sales started
to rise in each department as the economy began to grow in the second half of 2009. Consumer confidence
also started recovering in 2009, with the Conference Board’s Index of Consumer Confidence first stabiliz-
ing and then making modest upward moves during 2009 and early 2010.
Although the rate of job creation has headed upward, the number of inactive job seekers returning to
the labor force has kept unemployment rates just short of 10 percent during the first half of 2010. Housing
prices have stabilized in most states and are moving slowly upward in some states. Pent-up demand for
housing, typical of most recoveries, will not characterize this recovery.
The Federal Reserve has made it clear that short-term rates are likely to remain low during 2010. The
approach to the crisis in confidence in the financial markets, where counter-parties over-promised and
under-delivered hedging for the mortgage market, was to treat it as a liquidity problem and supply much
monetary ease. Add to that the strong net stimulus in fiscal policy in the economy and the stage is set for a
U.S. monetary and fiscal policy that will need to be reigned in by late 2011.
Dealerships in 2009 benefited from a 3.5 percent
increase in used-car sales revenue and a modest 1.9 percent About this special section
gain in service and parts sales, even as new-vehicle sales On the following pages, you will find the re-
fell 15 percent. Total 2009 dealership dollar sales were an sults of NADA’s yearlong analysis of the U.S.
estimated $487 billion, down by more than a billion from car and truck industry, with emphasis on the
2008, as the number of dealerships declined. Dealerships’ retail side of the business.
payroll employment dropped to just under one million The key segments covered are:
people. Total payroll expense in 2009 fell to $43.5 billion, Average Dealership Profile............................ 2
down 18.2 percent from 2008. NADA Optimism Index................................... 3
Dealership expenditures, excluding cost of goods sold, New-Car Dealerships..................................... 4
dropped to an estimated $71 billion in 2009 from $77 bil- Total Dealership Sales Dollars....................... 5
lion the previous year. New-vehicle dealers remained major The New-Vehicle Department......................... 7
generators of federal, state, and local tax revenue, as well as
F&I, Service Contracts.................................. 9
major contributors of both time and money to local and
The Used-Vehicle Department .................... 10
regional charities.
Service, Parts, and Body Shop.................... 11
Note: NADA’s Industry Analysis Division (Paul Taylor, chief Employment and Payroll............................. 13
economist) prepares NADA Data. Contact NADA Industry Vehicles in Operation and Scrappage........... 15
Analysis, 8400 Westpark Drive, McLean, VA 22102, call Advertising and the Dealership.................... 17
800.252.NADA, or e-mail [email protected].
Consumer Credit........................................ 18
New-Truck Dealerships............................... 19
1 NADA DATA 2010 nada.org
Dealership Financial Trends........................ 20
Average Dealership Profile
New-vehicle sales for the nation’s franchised dealers 4.7 percent. Floor-plan expense fell and advertising outlays
fell to 10.4 million units in 2009 as recession in the first decreased 13.6 percent. Some major expenses for the aver-
half of the year continued to diminish new light-vehicle age dealership last year:
sales. Total dealership revenue decreased to an estimated Payroll ...................................... $2,354,000
$501 billion from $598 billion in 2008. Used-car sales Advertising................................... $292,010
regained profitability in 2009 after a slight net loss in Rent and equivalent.......................$398,456
2008. New-vehicle sales revenue fell by 15.4 percent from
2008 while used-car revenue increased by 3.5 percent. Net TOTAL DEALERSHIP PROFITS
profit for the typical dealer increased by 43.7 percent from Used cars, along with service and parts, produced all of
2008, yielding 1.5 percent net profit before taxes on total the operating profits in 2009, as new-vehicle net profits
sales, or $398,067 in net pretax profit for 2009, up from remained in the red, which is typical for a recession year.
$277,045 for 2008.
New-vehicle department sales $20,116,264 $19,469,000 $18,795,482 $19,545,287 $16,302,280 $13,798,152 -15.40%
As % of total sales 60.90% 60.20% 59.00% 58.60% 57.20% 52.30%
Used-vehicle department sales $ 9,090,534 $ 9,067,128 $ 9,265,366 $ 9,821,093 $ 8,164,415 $ 8,452,020 3.50%
As % of total sales 27.50% 28.10% 29.10% 29.40% 28.60% 32.00%
Service and parts sales $ 3,802,537 $ 3,782,334 $ 3,794,920 $ 4,013,121 $ 4,051,172 $ 4,128,580 1.90%
As % of total sales 11.50% 11.70% 11.90% 12.00% 14.20% 15.70%
New-vehicle average selling price $ 28,060 $ 28,381 $ 28,451 $ 28,797 $ 28,350 $ 28,966 2.20%
Used-vehicle average selling price $ 14,247 $ 14,923 $ 15,518 $ 15,714 $ 15,200 $ 14,976 -1.50%
Average net worth (as of 12/31) $ 2,301,417 $ 2,258,753 $ 2,160,181 $ 2,306,742 $ 2,251,583 $ 2,213,007 -1.70%
Net profit as % of net worth 24.30% 23.50% 22.70% 22.00% 12.40% 18.00%
Source: NADA Industry Analysis Division
175
150
125
100
75
50
NADA Optimism Index
25 New-vehicle sales
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: NADA Industry Analysis Division
Of all brands, only Hyundai, Kia, February 687,076 9.1 1,169,217 15.3 -41.2%
March 855,167 9.8 1,351,542 15.1 -36.7%
and Subaru saw sales gains in 2009.
April 817,302 9.3 1,244,386 14.4 -34.3%
Overall, total light-vehicle sales fell by
May 923,830 9.9 1,392,840 14.3 -33.7%
22 percent for the year, but increased
June 857,410 9.7 1,185,435 13.6 -27.7%
by 4.2 percent in the fourth quarter of July 995,667 11.2 1,132,182 12.5 -12.1%
2009, as economic recovery got under August 1,259,996 14.1 1,246,053 13.7 1.1%
way in the second half of the year. September 744,165 9.2 962,427 12.5 -22.7%
October 835,672 10.4 834,752 10.5 0.1%
November 744,349 10.9 743,604 10.1 0.1%
December 1,026,246 11.2 893,072 10.3 14.9%
Full Year 10,401,682 10.4 13,194,626 13.2 -21.2%
*Seasonally adjusted annual rate
Source: NADA Industry Analysis Division
Gross as percentage of
selling price Service contract penetration rates
New vehicles retailed As % of new vehicles retailed
7.0% 40%
35
6.5
30
6.0
25
5.5 20
15
5.0
10
4.5
5
4.0 0
1999 2001 2003 2005 2007 2009 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: NADA Industry Analysis Division Source: NADA Industry Analysis Division
By department
1999 12,000
Other
2% 11,000
Auction
purchase 10,000
32% Trade-in on
new vehicle
40% 9,000
Street
purchase 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
4% Trade-in on Source: NADA Industry Analysis Division
used vehicles
22%
5
35
4 30
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1999 2001 2003 2005 2007 2009
Source: NADA Industry Analysis Division Source: NADA Industry Analysis Division
sales and the growth of the vehicle 2002 221,027,121 17,639,934 13,295,749 75.4
2003 225,882,103 16,939,662 12,084,680 71.3
population—was an estimated 14.6
2004 232,167,136 17,419,471 11,134,438 63.9
million units in 2009, up by almost
2005 239,384,168 17,287,680 10,070,648 58.3
1 million units from 2008. NADA 2006 244,642,610 17,332,357 12,073,915 69.7
Industry Analysis estimates that the 2007 248,700,997 16,765,603 12,707,216 75.8
average vehicle on the road, a higher 2008 249,812,723 15,127,946 14,016,220 92.7
measure than median, was 10.2 years 2009* 248,418,026 13,965,371 15,360,068 110.0%
*Covers 15 months of market activity (7/1/08 – 9/30/09) in order to capture the most recent behavior available. Source: R.L. Polk & Co.
Total vehicles in
operation, by year Average age of passenger cars, Estimated vehicle
trucks, and light trucks, by year scrappage
In millions
300 Total cars and trucks
12
In millions Percent
Cars
16 120%
Light trucks Number of vehicles
250 All light vehicles
Total scrapped during year
15 (left scale) 110
11
200 14
100
Trucks 13
150 90
10
12
80
100 11
70
Cars 9 10
50
60
9
Scrappage as % of 50
0 8 new-vehicle registrations
8
1999 2001 2003 2005 2007 2009* (right scale)
1999 2001 2003 2005 2007 2009*
7 40
*Covers 15 months of market activity (7/1/08 – 9/30/09) in
order to capture the most recent behavior available.
*Covers 15 months of market activity (7/1/08 – 9/30/09) in 1999 2001 2003 2005 2007 2009
order to capture the most recent behavior available.
Source: R.L. Polk & Co.
Source: R.L. Polk & Co. Source: R.L. Polk & Co.
500
9
400
8
300
7 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: NADA Industry Analysis Division
6
Estimated advertising expenses per dealership in 2009
5 By number of new units sold
Average of all 750 or
By media used dealerships 1–149 150–399 400–749 more
4 Newspapers $65,473 $23,753 $36,410 $72,865 $146,923
1999 2001 2003 2005 2007 2009 Radio 43,443 14,292 30,025 41,203 97,060
Source: NADA Industry Analysis Division TV 58,628 12,294 32,961 91,021 174,660
Direct mail 29,483 7,375 16,251 43,721 87,360
Internet 64,915 22,914 36,444 87,849 131,612
Other 30,068 9,122 18,957 39,917 63,444
Total $292,010 $89,749 $171,048 $376,576 $701,061
Total advertising as a
% of total sales 1.11% 1.13% 1.10% 1.13% 1.03%
Total advertising per
new vehicle sold $661 $842 $638 $544 $426
Source: NADA Industry Analysis Division
4
Average maturity of new-car
loans at finance companies 2
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Note: The bank series represents the average of direct 48 month loans.
2002 56.9 months The finance company series represents the average of all loans made. Source: Federal Reserve Board
2003 61.4
2004 60.5
2005 60.0 New-vehicle affordability measure
2006 62.3 Avg. finance Avg. length Avg. consumer Median family Avg. weeks of median
2007 61.0 rate loan expenditure* income family income to buy car*
2008 63.4 2004Q1 3.73% 59.56 months $22,508 $53,543 24.4
2009 62.0 2004Q2 4.50 60.62 22,909 53,888 25.1
Source: Federal Reserve Board 2004Q3 6.03 61.13 23,110 54,234 25.8
2004Q4 5.40 61.48 23,373 54,579 25.7
2005Q1 5.29 59.46 23,558 55,394 25.3