Avid watchers of the franchised dealership business held their collective breath when the coronavirus pandemic sent shockwaves through the auto industry in March 2020. No one dreamed the business of selling cars was about to see profitability rocket to unimaginable levels.
But we know just how dramatically profits soared during the second half of 2020 and through most of 2021 because of the National Automobile Dealers Association’s average dealership financial profile, which had long been released monthly and reported on by industry media. Then NADA stopped sharing that data after October 2021, creating a vacuum in dealership performance data to inform the industry.
Until now.
With the debut of the Presidio-NCM Average Dealership Performance Trends report, The Presidio Group and NCM Associates are stepping in to fill that void. The report is based on aggregated financial results of around 4,400 U.S. franchised dealerships of all brands and sizes that work with NCM, which provides 20 groups, consulting and training to dealers across the country. The number of outlets contributing to the data represent nearly a quarter of all 18,000-plus dealerships in the U.S.
While a dollar figure for the average store’s net pretax profit is not being shared right now, we are reporting the rate of change in that number. The trajectory of that change clearly shows where profitability is heading for the average car dealership in the U.S. — down from the record highs and moving closer to pre-pandemic levels.
The Presidio-NCM report clearly supports our view that the auto retail sector is now firmly experiencing the “Great Normalization” as pandemic-driven peak dealership profitability descends to levels more in line with historical patterns.
We believe sharing the average dealership’s performance metrics provides a service to the industry found nowhere else. Visibility around the typical dealership’s financial results creates a benchmark that all dealers can learn and benefit from.