Franchises for the Chrysler and Volkswagen brands increased their average sales in 2012 by around a third, even with the addition of more franchises last year. Chrysler posted a 36-percent increase in sales per store while VW logged a 32-percent jump in sales per store in 2012 – more than double the 15-percent average industry increase.
The brands’ increases in average sales were also the largest among mainstream brands last year. Sales per franchise make a difference since higher sales mean higher profits as well as a healthier overall industry. Most brands are increasing sales per franchise by holding steady the number of franchises. In 2012, the number of franchises across the auto industry remained essentially unchanged.
According to the annual dealership census of Automotive News, franchises in the US dropped by 69 to 31,376 in 2012. Meanwhile, new vehicle sales in the US jumped 13 percent to 14,492,398 units. This increases the average number of sales per franchise by 60 units, to 465.
John Frith, a vice president at retail consulting firm Urban Science, remarked that although there are fewer dealerships now than a decade ago, the current balance of sales and dealerships is good. He remarked that dealerships, in general, are larger and can easily manage the increase in sales. Frith cautioned that carmakers should be careful not to add or drop too many dealerships, since profits are tied to throughput.
In 2012, the Chrysler brand added 55 franchises and sold 39-percent more new cars and light trucks. While its throughput of 137 units per franchise is below the industry average, the brand drew closer to that average, increasing per-franchise sales by 36 units, or 36 percent.
The number of Chrysler brand franchises continued to rise in 2012 even as Chrysler Group has pushed all of its dealers to sell all of its brands. A spokesman for the carmaker disclosed that around 91 percent of dealerships that sell Chrysler brand vehicles also sell the Dodge, Jeep, and Ram brands.