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U.S. Auto Dealers Heading for Record Year

Showroom count down, sales per outlet up.

by on Aug.15, 2012

After years of struggle, U.S. car dealers are reporting strong earnings and record sales.

After years of struggle that saw 3,000 U.S. retailers shutter their showrooms, this could be a record year for American auto dealers.

Profits are back and sales are likely to reach an all-time high, at least on a per-dealership basis, according to a new report by the Detroit-based consulting firm, Urban Science.  Meanwhile, industry officials note that dealers are investing billions of dollars in showroom updates and expansions designed to not only improve customer service but to also handle the anticipated growth as the U.S. market finally recovers from years of recession.

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“It looks like we’re going to hit a record this year,” said John Frith, who oversees retail network research for Urban Science. “Automakers,” he noted, “have kept their networks relatively flat, giving existing dealerships the opportunity to take advantage of increased sales volume. By doing this, and in turn achieving record throughput levels, dealers are making a profit for the first time in more than three years.”

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Chinese Market Dominated by Mega-Dealers

China’s showrooms dwarf those in the West.

by on Aug.15, 2012

The new AMG Performance Center in Beijing.

The typical Chinese car dealership sells approximately 980 vehicles annually, substantially more than dealers in Europe and North America as China’s government actively promotes the creation of large dealer groups, according to a new report released Tuesday.

“The sales network in China is at a crossroads,” said Hamilton Gayden, managing director, Urban Science China, during a conference call from his office in Shanghai.

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“Until this point, automotive manufacturers have been largely concerned with getting enough operators established to manage their sales. Today, with the sales pace calming, manufacturers are rethinking their retail footprints and being much more strategic, shifting from a network built simply on relationships to – for the first time – a true network plan driven by data,” Gayden said.

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