While American auto dealers celebrated a record-shattering $1.22 trillion in revenue for 2023, the true story of this trillion-dollar industry is told in the thousands of data points, from the surge in EV sales to the intense battle for service technicians, that reveal where the road is headed next.
Key Takeaways
- In 2023, U.S. auto dealerships generated total gross revenues of $1.22 trillion, marking a 12% increase from 2022
- New-car dealership gross profit reached $52.6 billion in 2023, up 19% year-over-year due to higher average transaction prices
- U.S. franchised new-car dealers accounted for 77% of all auto retail sales revenue in 2023 at $1.1 trillion
- U.S. franchised new-car dealers retailed 15.5 million new vehicles in 2023
- Used vehicle retail sales by franchised dealers totaled 7.4 million units in 2023
- Total U.S. light vehicle sales through dealers reached 15.6 million in 2023
- U.S. franchised dealers employed 1.18 million people in 2023
- Average dealership employment was 380 full-time equivalents in 2023
- Auto dealer industry total employment reached 1.4 million including independents in 2023
- 42% of U.S. auto buyers were millennials aged 25-40 in 2023
- 28% of new vehicle buyers were over 55 years old in 2023
- Female buyers accounted for 48% of auto purchases in 2023
- 75% of U.S. dealers offered online purchasing tools in 2023
- Digital retailing penetration reached 45% of sales in 2023
- 92% of consumers used dealer websites pre-purchase in 2023
Auto dealerships thrived as sales grew significantly across both new and used vehicles in 2023.
Customer Demographics
- 42% of U.S. auto buyers were millennials aged 25-40 in 2023
- 28% of new vehicle buyers were over 55 years old in 2023
- Female buyers accounted for 48% of auto purchases in 2023
- Hispanic consumers represented 20% of new vehicle sales in 2023
- Average buyer household income was $105,000 for new cars in 2023
- 35% of buyers financed 72+ months in 2023
- Urban buyers made up 55% of dealer traffic in 2023
- Gen Z buyers increased to 12% of total sales in 2023
- Repeat buyers loyalty rate was 52% at franchised dealers in 2023
- 62% of buyers researched online before visiting dealers in 2023
- African American buyers were 13% of new vehicle market in 2023
- Average buyer credit score was 755 for new vehicles in 2023
- Suburban households drove 45% of SUV sales in 2023
- 25% of buyers leased their vehicles in 2023
- Baby boomers held 40% of total vehicle ownership in 2023
- High-income buyers (> $150k) were 32% of luxury sales in 2023
- Online appointment setters were 40% of customers in 2023
- First-time buyers declined to 22% in 2023
- EV buyers average age was 47 years in 2023
- Trade-in volume per sale averaged 65% in 2023
- Rural buyers preferred trucks at 35% rate in 2023
- 55% of buyers used mobile apps for shopping in 2023
- Multi-vehicle household buyers were 70% of sales in 2023
- Average down payment was 10% of transaction price in 2023
- 68% digital retail adoption among under-35 buyers in 2023
Customer Demographics Interpretation
The auto market is a delicate ecosystem where credit-rich millennials in cities browse on their phones, suburban families reliably trade in for SUVs, and boomers still own the roads, but everyone is united by long loans and a stubborn loyalty to their local dealer.
Employment
- U.S. franchised dealers employed 1.18 million people in 2023
- Average dealership employment was 380 full-time equivalents in 2023
- Auto dealer industry total employment reached 1.4 million including independents in 2023
- Sales department headcount averaged 45 employees per new-car dealership in 2023
- Service technicians employed by dealers numbered 260,000 in 2023
- Dealer payroll expenses totaled $108 billion for franchised dealers in 2023
- Average salesperson compensation was $135,000 including commissions in 2023
- Parts department staff averaged 25 per dealership in 2023
- Turnover rate for sales staff at dealerships was 72% annually in 2023
- Fixed operations employed 55% of total dealership workforce in 2023
- Administrative staff made up 12% of dealer employment in 2023
- Independent dealers employed 250,000 people in 2023
- Service advisor average salary was $95,000 per year in 2023
- Total dealer industry jobs supported 4.5 million indirect positions in 2023
- Technician labor rate averaged $165 per hour at dealers in 2023
- Finance and insurance staff averaged 8 per dealership in 2023
- Dealer principal compensation averaged $1.2 million in 2023
- Body shop employment totaled 35,000 across U.S. dealers in 2023
- Entry-level sales positions turnover was 85% in 2023
- Average benefits cost per employee was $18,500 annually in 2023
- Quick service lane staff grew 15% to 20,000 in 2023
- Multi-rooftop dealer groups employed 60% of total franchised staff in 2023
- Female employment in sales rose to 18% of total sales staff in 2023
- Labor shortage affected 65% of service departments in 2023
- Average service manager salary was $160,000 in 2023
- Total training hours per employee averaged 25 annually in 2023
Employment Interpretation
The auto dealership industry is a high-revving economic engine, employing a massive 1.4 million Americans directly and 4.5 million indirectly, but it's running hot with a costly 72% sales turnover, a persistent labor shortage, and a payroll bill of $108 billion that shows just how much we're willing to pay for both our cars and the human beings who sell and fix them.
Market Size & Revenue
- In 2023, U.S. auto dealerships generated total gross revenues of $1.22 trillion, marking a 12% increase from 2022
- New-car dealership gross profit reached $52.6 billion in 2023, up 19% year-over-year due to higher average transaction prices
- U.S. franchised new-car dealers accounted for 77% of all auto retail sales revenue in 2023 at $1.1 trillion
- Independent auto dealers in the U.S. had combined annual revenue of $150 billion in 2022
- The auto dealer industry contributed $120 billion in direct economic impact through taxes and wages in 2023
- Average gross profit per new vehicle retailed by U.S. dealers was $4,842 in 2023
- U.S. auto retailers' service and parts departments generated $138 billion in revenue in 2023, up 8% from prior year
- Total U.S. light-vehicle dealer sales revenue hit $1.04 trillion in 2022
- Franchise dealers' finance and insurance revenue averaged $2,200 per new vehicle in 2023
- The U.S. auto dealer sector's pretax profit margin stood at 3.2% in 2023 for new-car dealers
- Used-vehicle gross profit for dealers averaged $2,945 per unit in 2023
- Auto dealer industry market size in the U.S. was valued at $1.2 trillion in 2023
- New-car dealers' total capital expenditures reached $15.4 billion in 2023
- U.S. dealers' average net working capital per dealership was $4.7 million in 2023
- The sector employed 1.2 million people with payroll exceeding $100 billion in 2023
- Auto retail gross margins improved to 10.2% in 2023 from 9.1% in 2022
- U.S. new auto dealer net profit after tax was $18.2 billion in 2023
- Independent dealers' revenue grew 5% to $158 billion in 2023
- Service absorption rate for new-car dealers averaged 104% in 2023
- Total U.S. auto dealer advertising spend was $6.5 billion in 2023
- Franchised dealers' average revenue per dealer was $1.4 billion in 2023
- U.S. auto dealer EBITDA margins hit 12.5% in Q4 2023
- Parts department gross profit margin was 52% for average dealers in 2023
- Dealer cash reserves totaled $55 billion across U.S. franchised dealers in 2023
- U.S. used car dealer market revenue projected at $170 billion for 2024
- New vehicle department gross margins averaged 9.8% in 2023
- Total dealer group revenue for top 150 dealers exceeded $200 billion in 2023
- Average dealer floorplan financing was $3.2 million per dealership in 2023
- U.S. auto dealer industry CAGR was 4.2% from 2018-2023
- Franchised light-truck dealers generated 60% of new vehicle revenue in 2023
Market Size & Revenue Interpretation
Even as car buyers wince at a near-five-thousand-dollar gross profit on each new vehicle, the industry's trillion-dollar revenue and surprisingly thin 3.2% profit margin reveal a paradox where soaring sticker prices and a voracious service department (earning $138 billion) barely keep the lights on across 1.2 million jobs.
Technology & Innovation
- 75% of U.S. dealers offered online purchasing tools in 2023
- Digital retailing penetration reached 45% of sales in 2023
- 92% of consumers used dealer websites pre-purchase in 2023
- AI chatbots handled 30% of initial leads at top dealers in 2023
- Dealer DMS cloud adoption was 65% in 2023
- Virtual showrooms used by 40% of luxury dealers in 2023
- CRM software utilization averaged 85% across franchised dealers in 2023
- EV charging stations at 25% of dealer lots in 2023
- Mobile service vans deployed by 18% of dealers in 2023
- Blockchain for title processing piloted by 5% of large groups in 2023
- Desking software adoption hit 70% in F&I departments in 2023
- AR vehicle configurators used in 35% of showrooms in 2023
- Data analytics ROI averaged 15:1 for investing dealers in 2023
- Contactless service payments accepted by 88% of dealers in 2023
- Inventory management AI reduced days supply by 10 days in 2023
- Dealer app downloads exceeded 10 million in 2023
- Cybersecurity incidents affected 12% of dealers in 2023
- Omnichannel retailing boosted conversion by 20% in 2023
- Robotic service automation in 8% of large service centers in 2023
- Voice commerce trials by 15% of dealers for parts sales in 2023
- Predictive maintenance software used by 42% of service depts in 2023
- NFT vehicle customizations experimented by 2% premium dealers in 2023
- 5G showroom connectivity in 30% of urban dealers in 2023
- Personalized video marketing ROI at 4:1 in 2023
- Dealer portal EV incentives claims automated for 60% in 2023
- Biometric secure access in F&I offices at 22% adoption in 2023
- Drone inventory scanning piloted by 10% mega-dealers in 2023
- Metaverse test drives hosted by 3% innovative dealers in 2023
- IoT service reminders boosted RO by 15% for users in 2023
Technology & Innovation Interpretation
The industry's frenzied sprint into digital transformation is clunkily stitching together the future, one app, chatbot, and drone at a time, creating a landscape where nine in ten customers research online but only half the sale happens there, proving that while cars might go electric, the dealer experience is still running on a hybrid engine of high-tech hope and old-school habits.
Vehicle Sales
- U.S. franchised new-car dealers retailed 15.5 million new vehicles in 2023
- Used vehicle retail sales by franchised dealers totaled 7.4 million units in 2023
- Total U.S. light vehicle sales through dealers reached 15.6 million in 2023
- Electric vehicle sales at U.S. dealers grew 50% to 1.2 million units in 2023
- Average new vehicle transaction price was $48,759 in Q4 2023, up 2% YoY
- Dealers sold 2.1 million certified pre-owned vehicles in 2023
- Pickup truck sales accounted for 20% of total dealer new vehicle volume in 2023
- Used vehicle sales days' supply averaged 42 days in December 2023
- SUV/CUV sales made up 52% of new vehicle retail sales in 2023
- Independent dealers retailed 9.8 million used vehicles in 2023
- New vehicle inventory at dealers reached 2.8 million units by end of 2023
- Retail used vehicle sales totaled 17.5 million units across all U.S. dealers in 2023
- Luxury vehicle sales through dealers increased 4% to 2.9 million in 2023
- Average used vehicle selling price fell to $27,300 in Q4 2023
- Dealers wholesaled 6.2 million used vehicles at auctions in 2023
- Hybrid vehicle sales surged 45% to 1.1 million units via dealers in 2023
- Commercial van sales at dealers totaled 1.4 million in 2023
- New vehicle sales conversion rate averaged 18% in 2023
- Off-lease used vehicle supply to dealers was 1.8 million units in 2023
- Sedan sales declined 15% to 1.9 million units at dealers in 2023
- Total fleet sales through dealers were 2.3 million vehicles in 2023
- Dealer new vehicle market share was 78% of total U.S. sales in 2023
- Used luxury vehicle sales grew 7% to 1.2 million in 2023
- Average time-to-turn for new vehicles at dealers was 58 days in 2023
- Total new light truck sales hit 9.2 million units via dealers in 2023
- Private party used vehicle sales impacted dealer volume by 10 million units in 2023
Vehicle Sales Interpretation
Amidst a sea of pricey SUVs and pickups, the American auto dealer is masterfully navigating a dual market where electric dreams accelerate while used-car realities gently depreciate on the lot.