Auto Dealership Trend Report In 2023
Dealerships By the Numbers: Measuring Industry Performance
By Sam Agresti
As we head toward the home stretch of 2023, business consultants (at least myself and my team) monitor car stats and data from throughout the year. New inventory sales, M&A activity and other data points help put context and strategic direction to your dealerships.
From some of our most trusted sources, see how these numbers compare to what you’re seeing in the marketplace.
Boost in New Vehicle Sales in June
New light-vehicle sales grew 20% in June 2023 compared to the June 2022 seasonally adjusted at annual rates (SAAR), and sales volume for the first half of the year was up 13% year over year, according to the NADA Market Beat.
The June 2023 SAAR totaled 15.7 million units. We continue to see market share head toward alternative fuel vehicles. In the first six months of the year, alternative fuel vehicles increased, climbing to 15.4% of all new light vehicles sold. Battery electric vehicles represented 6.9% of all new light-vehicle sales, an increase of nearly 5% from the first half of 2022. This can be attributed in part to greater inventory levels driving higher sales.
New light-vehicle inventory on the ground and in-transit totaled 1.81 million units at the beginning of June 2023, and manufacturer incentive spending has also increased. According to JD Power, average incentive spending per unit is projected to total $1,798 in June 2023, up 95.9% from June 2022.
From Haig
Their reporting is always fantastic and, from their second quarter 2023 report, here were some interesting details:
- Q2 2023 saw the highest price ever paid for a single-point dealership in automotive history.
- The average publicly owned dealership made $5.8M in the 12-month period ended Q2 2023, a 10% drop from year-end 2022. Despite the decline, profits remain nearly triple pre-pandemic levels.
- Public company acquisition spending ramped up in Q2 ‘23, nearly reaching $1B in the quarter, bringing the Q2 ‘23 YTD spend nearly in line with last year.
- Average estimated blue sky values remained robust in LTM Q2 2023, down just 7% from the record levels seen in 2022.
M&A From Kerrigan Advisors
Kerrigan Advisors’ always interesting report tells us this about M&A activity from their extensive reporting in second quarter 2023:
- The 2023 buy/sell market is on track for a record year. Through just the first half of 2023, transaction activity has increased an impressive 26%, in line with the average full year activity pre-Covid. On a trailing twelve-month basis, a record 418 transactions have been completed.
More Importantly, What Are Your Numbers Doing?
At the end of the day, averages are only averages. Our business advisors want you to surpass your individual goals in your unique market. We have the expertise to guide you to make important decisions that will get you where you want to go.
Set up a business assessment with us today.
Dealership Experts
Sam Agresti is a Shareholder at Brady Ware, specializing in dealership financial strategy and operational consulting. With deep experience in the retail automotive space, Sam partners with dealership owners and managers to improve profitability, streamline operations, and navigate complex industry challenges. He is a trusted advisor to growing dealer groups across the country.