Despite setting a new revenue record of $1.2 trillion last year, the modern auto dealership’s real story lies hidden in a cascade of surprising numbers, from soaring EV interest to razor-thin profit margins.
Key Takeaways
- In 2023, U.S. franchised new-car dealerships generated $1.2 trillion in total gross revenue, marking a 12% increase from 2022.
- Light-duty truck sales accounted for 79.3% of new vehicle sales at franchised dealerships in 2023.
- Average new vehicle gross profit per unit at franchised dealerships rose to $3,115 in 2023, up 38% from 2022.
- Total U.S. new light-vehicle sales were 15.6 million units in 2023.
- Toyota sold 2.25 million new vehicles in the U.S. in 2023.
- Ford F-Series trucks sold 750,789 units in 2023, leading segment.
- New car inventory levels reached 2.8 million units by end of 2023.
- Average age of new vehicle inventory was 50 days in December 2023.
- Used vehicle inventory averaged 2.2 million units at retail in Q4 2023.
- 76% of consumers researched vehicles online before visiting dealership in 2023.
- 62% of buyers used mobile apps for vehicle shopping in 2023.
- Average time spent at dealership was 3.2 hours for new car purchases in 2023.
- Electric vehicle consideration rose to 35% among all buyers in 2023.
- U.S. auto dealership count was 18,183 franchised stores in 2023.
- EV market share reached 7.6% of new vehicle sales in 2023.
The U.S. auto dealership industry saw strong growth in sales and profits during 2023.
Customer Insights
- 76% of consumers researched vehicles online before visiting dealership in 2023.
- 62% of buyers used mobile apps for vehicle shopping in 2023.
- Average time spent at dealership was 3.2 hours for new car purchases in 2023.
- 81% of used car buyers prioritized fuel economy in 2023 survey.
- Loyalty rate for new vehicle buyers was 52% in 2023.
- 45% of buyers financed 100% of vehicle cost in 2023.
- Women accounted for 48% of new vehicle purchasers in 2023.
- Millennials made up 38% of new car buyers in 2023.
- 67% of EV intenders delayed purchase due to charging concerns in 2023.
- Average down payment on new vehicles was 10% or $4,800 in 2023.
- 55% of buyers read online reviews before visiting dealership.
- Gen Z buyers increased to 15% of total new sales in 2023.
- 73% preferred touchless buying processes post-pandemic.
- Hispanic buyers grew to 22% of new vehicle market in 2023.
- 41% of buyers traded in older EV for new model in 2023.
- Satisfaction with negotiation process scored 792/1000 in 2023 J.D. Power study.
- 64% of luxury buyers valued technology features highest.
- Repeat purchase intent was 78% for satisfied CPO buyers.
- 50% of buyers under 35 prioritized autonomous features.
- Average loan term for new vehicles reached 69 months in 2023.
- 82% of in-market shoppers started online in 2023 Cox study.
- Price was top factor for 71% of used car shoppers.
Customer Insights Interpretation
The modern dealership experience is a curious blend of digital homework and analog endurance, where consumers arrive armed with online research and fuel economy spreadsheets only to spend hours negotiating a deal they'll mostly finance, all while the industry nervously eyes Gen Z's growing presence and everyone secretly wonders where to plug in these electric cars.
Employment and Workforce
- Average dealership employee count was 65 full-time equivalents in 2023.
- Auto industry supported 9.5 million jobs directly and indirectly in 2022.
- Technician shortage affected 70% of dealerships in 2023.
- Average technician wage increased 8% to $75,000 annually in 2023.
- 52% of dealerships reported hiring challenges for sales staff.
- Women comprised 22% of auto dealership workforce in 2023.
- Turnover rate for sales consultants was 42% in 2023.
- Training hours per employee averaged 24 annually in 2023.
- 65% of technicians were certified for EV repair in late 2023.
- Dealership HR tech adoption rose to 60% for recruiting.
- Average sales per employee was $1.8 million in 2023.
- Service advisors turnover was 35% industry average.
- 40% of new hires required upskilling for digital tools.
- Unionization efforts at non-union dealers increased 15%.
- Diversity training implemented at 75% of large groups.
- Remote work for admin staff reached 20% post-2023.
- Wage growth for F&I managers was 10% YoY.
- 55% of dealerships offered mental health benefits in 2023.
- Apprenticeship programs trained 12,000 new techs in 2023.
- Sales staff commissions averaged 25% of gross profit.
Employment and Workforce Interpretation
The auto dealership industry, propped up by an army of 9.5 million, is a frantic high-wire act of paying people more to stay in a revolving door while frantically training new ones to plug the gaps in an increasingly complex and demanding circus.
Financial Performance
- In 2023, U.S. franchised new-car dealerships generated $1.2 trillion in total gross revenue, marking a 12% increase from 2022.
- Light-duty truck sales accounted for 79.3% of new vehicle sales at franchised dealerships in 2023.
- Average new vehicle gross profit per unit at franchised dealerships rose to $3,115 in 2023, up 38% from 2022.
- Franchised dealerships' average net profit per new vehicle retailed increased to 5.8% in 2023 from 4.3% in 2022.
- U.S. auto dealers sold 15.5 million new vehicles in 2023, a 12.4% increase year-over-year.
- Service and parts departments at franchised dealerships generated $148 billion in revenue in 2023.
- Average pretax profit margin for franchised new-car dealerships was 2.5% in 2023.
- Used vehicle sales at franchised dealerships reached 18.4 million units in 2023.
- Franchised dealerships employed 1.2 million people in 2023, paying $88 billion in wages.
- Auto retail industry paid $100 billion in state and local taxes in 2022.
- Franchised new-car dealers contributed $55.9 billion to U.S. GDP in 2021.
- Independent dealerships sold 17.6 million used vehicles in 2022.
- New-car dealers’ service/parts gross margins averaged 51% in 2022.
- Average revenue per new-car dealership reached $1.3 billion in 2022.
- U.S. auto dealers invested $32 billion in capital expenditures in 2022.
- Franchised dealers’ average new-car inventory was 38 days’ supply in Q4 2023.
- New vehicle affordability index fell to 127 in December 2023, down 8% from prior year.
- Average new vehicle transaction price was $48,759 in December 2023.
- Used vehicle gross profit per unit averaged $2,604 in Q4 2023.
- Dealer service revenue grew 8% year-over-year in 2023.
- F&I gross profit per new vehicle retailed was $2,498 in 2023.
- Average dealership pretax profit per employee was $127,000 in 2023.
- Parts department gross profit margin reached 46% in 2023.
- New-car department expenses as % of gross profit were 87.9% in 2023.
- Used-car department gross profit per unit was $2,337 in 2023.
Financial Performance Interpretation
Americans' insatiable appetite for expensive trucks and dealerships' masterful art of the add-on are masking the fact that, despite record revenue, this remains a brutal volume game where the real profit is in fixing what they sell.
Industry Trends
- Electric vehicle consideration rose to 35% among all buyers in 2023.
- U.S. auto dealership count was 18,183 franchised stores in 2023.
- EV market share reached 7.6% of new vehicle sales in 2023.
- Autonomous vehicle tech adoption in fleets grew 25% in 2023.
- Digital retailing penetration hit 40% of sales in 2023.
- Supply chain disruptions reduced production by 10% in 2023.
- Used-to-new sales ratio was 1.17:1 in 2023.
- Dealer consolidation rate was 5% annually over past 5 years.
- Service absorption rate averaged 92% for top dealerships in 2023.
- Chip shortage resolved, boosting inventory 50% from 2022 lows.
- Right-to-repair legislation impacted 30% of service revenue projections.
- Online lead conversion rate improved to 18% in 2023.
- Average dealership square footage increased 15% since 2019.
- Subscription models for vehicles piloted at 10% of dealers.
- Tariffs on Chinese EVs proposed, affecting 5% potential imports.
- Dealer advertising spend rose 12% to digital channels in 2023.
- Vehicle-to-everything (V2X) tech in 2% of new models 2023.
- Franchise terminations dropped 40% from peak in 2023.
- U.S. franchised new-car dealers numbered 16,850 in 2023.
- Total auto retail establishments reached 107,000 in 2023.
Industry Trends Interpretation
The data shows an industry in frantic, simultaneous renovation, where nearly every aspect of the car business—from how we dream about EVs to how we fix them—is being fundamentally and chaotically rewired at once.
Inventory Management
- New car inventory levels reached 2.8 million units by end of 2023.
- Average age of new vehicle inventory was 50 days in December 2023.
- Used vehicle inventory averaged 2.2 million units at retail in Q4 2023.
- Days' supply for used vehicles fell to 35 days in December 2023.
- 68% of new vehicle inventory was 60 days old or less in Q4 2023.
- Wholesale used vehicle prices declined 1.5% MoM in December 2023.
- Average used retail listing price was $27,200 in December 2023.
- New EV inventory days' supply was 74 days in Q4 2023.
- 45% of dealerships reported inventory shortages for popular models in 2023.
- Used truck inventory levels were 40 days' supply in late 2023.
- Franchised dealers held 55% of total used vehicle inventory in 2023.
- Average cost per new vehicle in inventory rose to $47,500 in 2023.
- Off-lease vehicles returning to market increased 20% in 2023.
- Certified Pre-Owned (CPO) inventory grew 10% to 1.9 million units in 2023.
- Average mileage on used vehicles sold was 47,000 miles in 2023.
- Luxury used vehicle inventory days' supply was 42 days in Q4 2023.
- 92% of new vehicles were allocated by manufacturers in 2023.
- Used vehicle wholesale volume was 6.5 million units in 2023.
- Subcompact SUV inventory averaged 65 days' supply in 2023.
- Dealer consignments made up 25% of used inventory in 2023.
- New midsize SUV inventory was at 55 days in December 2023.
- Trade-ins accounted for 52% of used vehicle acquisitions in 2023.
Inventory Management Interpretation
The auto industry is precariously balanced: despite overflowing lots, dealer costs are climbing, used car prices are softening, and buyers are still finding some models frustratingly scarce.
Sales Volume
- Total U.S. new light-vehicle sales were 15.6 million units in 2023.
- Toyota sold 2.25 million new vehicles in the U.S. in 2023.
- Ford F-Series trucks sold 750,789 units in 2023, leading segment.
- Electric vehicle sales reached 1.2 million units in U.S. in 2023, up 50%.
- Pickup trucks accounted for 20% of total U.S. vehicle sales in 2023.
- SUV/Crossover sales made up 52% of U.S. new vehicle market in 2023.
- Used car sales totaled 36 million units in U.S. in 2023.
- Tesla Model Y was best-selling vehicle with 385,900 units in 2023.
- Ram Pickup sales were 444,926 units in 2023.
- Chevrolet Silverado sold 543,319 units in 2023.
- Honda CR-V sales reached 361,457 units in 2023.
- New vehicle sales per dealership averaged 1,200 units annually in 2023.
- Online vehicle sales represented 25% of total transactions in Q4 2023.
- 84% of new vehicle buyers used digital tools in shopping process in 2023.
- Average days to turn new vehicle inventory was 58 days in 2023.
- Used retail units sold per dealer store averaged 1,100 in 2023.
- Luxury vehicle sales grew 15% to 2.8 million units in 2023.
- Hybrid vehicle sales surged 50% to 1.1 million units in 2023.
- Q1 2024 new vehicle sales hit 3.14 million units, up 5% YoY.
- GMC Sierra sales were 295,737 units in 2023.
- Toyota RAV4 sold 434,943 units in 2023.
- Jeep Wrangler sales reached 194,807 units in 2023.
- Nissan Rogue sales were 271,458 units in 2023.
- Average new vehicle sales per capita in U.S. was 47 per 1,000 people in 2023.
- New vehicle sales through auctions accounted for 15% of dealer acquisitions in 2023.
- 72% of used vehicles sold were under 5 years old in 2023.
Sales Volume Interpretation
Americans, fiercely loyal to their SUVs and pickups, are flirting with a greener future by the millions while simultaneously ensuring their driveways remain a monument to both electric ascendance and gas-powered tradition.
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