“With average dealership performance leveling, has the industry reached a new normal?”
Full-year data from the Presidio-NCM Average Dealership Performance Benchmark shows that auto dealers’ operational performance turned a decisive corner during the last three months of 2024, tempering the rate of profit decline the average store experienced last year. The results provide more evidence that the industry is approaching a new normal likely to be characterized by higher overall profitability with a store’s brand and geography as differentiating factors.
Net pretax profit for the average U.S. franchised store dropped 24.4% for full-year 2024 compared with 2023. That notably bettered the 30.4% decline recorded for the first nine months of this year. While 2024 ultimately could go down as the year with the steepest profit decline from pandemic-era highs for the typical U.S. dealership, the leveling off seen in the second half may also mark the start of recovery.
“The latest evidence, both from the Presidio-NCM data and Presidio’s year-end dealer survey, indicates that the auto retail sector is at the tail end of the Great Normalization,” said George Karolis, president of The Presidio Group. “Dealers are more optimistic about their future profitability heading into 2025, and we expect their new normal will include profitability that stabilizes at levels well above pre-pandemic benchmarks, at least for certain brands.”