Printer Friendly

NADA REPORT SAYS FRANCHISE SYSTEM WILL REMAIN STRONG

 WASHINGTON, July 12 /PRNewswire/ -- Annual new-vehicle sales will likely build back to the 15 million level and remain stable for the rest of the decade, profitability in the new-vehicle department will remain elusive, but the franchise system will remain strong, according to a new report by the National Automobile Dealers Association.
 "Although there will be difficulties, the franchised new-car industry will be no different from other American businesses facing intense competition," said the report, "The Future of the Retail Auto Industry: Project 2000 Report Part 4," published in the July 1993 issue of NADA's Automotive Executive magazine.
 "The new-vehicle market in the United States is mature, driven by consumers less able to buy because of competing financial needs and able to retain their current vehicles longer because of higher quality," the report said. "It's a market where automakers are in varying states of duress and success and where the demands of consumers and automakers will continue to squeeze dealer margins."
 Driven primarily by replacement demand, NADA's new-vehicle sales forecast calls for sales of 13.5 million in 1993, 14.3 million in 1994, 15.0 million in 1995, 15.5 million in 1996, 15.2 million in 1997 and 15.0 million in 1997-2000.
 The report said the average new-car dealership will likely net a meager 1 percent on combined new- and used-vehicle sales through 2000. Although poor compared with the 2 percent return of the mid-1980s, it is better than the break-even results of 1990-91. Combined with an expected 7 percent net profit from sales of service and parts, the total dealership net profit should reach 1.9 percent -- the best since 1987.
 The trend toward dealership consolidation will continue, but at a slower pace, the report said. There were more than 47,000 dealerships in 1950 but fewer than 23,000 at the start of 1993 -- an average annual net loss of more than 550. But NADA expects a net loss of only 250 in 1993 and a loss of 150 per year from 1994 to 2000.
 The report said the franchise system itself will remain strong because, "As product quality continues to standardize, the buying and servicing experience of a given franchise will set it apart from the others. To ensure that those experiences are first rate, automakers are investing tens of millions of dollars in dealership training programs and incentives."
 "In this environment," the report concluded, "dealers will be pulled in many directions as they try to balance the desire to control their businesses with the reality of having to use corporate incentive money to maximize profits."
 -0- 7/12/93
 /CONTACT: Ted Orme of the National Automobile Dealers Association, 703-827-7407 or, fax, 703-821-7075/


CO: National Automobile Dealers Association ST: District of Columbia IN: AUT SU:

DC-MH -- DC013 -- 0337 07/12/93 10:35 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 12, 1993
Words:469
Previous Article:CALIFORNIA EMISSION STANDARDS WILL COST THE CONSUMER, AUTO DEALERS SAY
Next Article:CITIZENS FEDERAL BANK REDEEMS $38.7 MILLION OF PREFERRED STOCK; EXPENSES WILL BE REDUCED BY MORE THAN $2 MILLION PER YEAR
Topics:


Related Articles
DETROIT AND NATIONAL AUTO DEALER ASSOCIATIONS DONATE CPR TRAINING MANNEQUINS TO LOCAL ORGANIZATIONS
NADA WASHINGTON CONFERENCE TO ADDRESS KEY AUTO INDUSTRY ISSUES
NADA ISSUES SPECIAL REPORT ON REDUCED NEW-VEHICLE MARGINS
NADA: AUTO IMORT TARIFFS WOULD HURT AMERICAN CONSUMERS, EMPLOYEES AND DEALERS
NADA ALERTS DEALERS ON MANUFACTURER NETWORK RESTRUCTURING AND COST SHIFTING PLANS
Used Vehicles Drove Profits in '95, According to NADA Data
NADA Sues EPA, Challenges New Air Quality Regs
Traffic Jam.
AutoNation, NADA Announce Plans to Work Together on Industry Issues.
Students to Explore Auto Careers in New Car Dealerships.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters