Mathilde Carlier
Research Expert covering transportation and logistics
Auto Dealers in the United States - Facts & Statistics
In 2021 and 2022, in the United States, the automotive sector had to adapt to a rapidly changing market hit by the automotive semiconductor shortage. Around 11.3 million vehicles were cut from production worldwide in 2021 due to the lack of chip supply. Another seven million are expected to be removed from production in 2022. These output cuts contributed to light vehicle price inflation and limited vehicle selection in the U.S., which has impacted car buyers’ experience. In this context, the U.S. auto industry faces financial challenges. The real value added of motor vehicle and parts dealers has been dropping since 2020, down over eight percent year-over-year to 216.6 billion U.S. dollars in 2021. However, sales were on the rebound in 2021. The U.S. auto industry recorded over 43 million used light vehicle sales and approximately 14.9 million new light vehicle retail sales.
With 48 percent of U.S. consumers intending to buy an automobile as of March 2022, the U.S. light vehicle market is becoming more competitive for auto dealers. As of January 1st, 2022, about 18,230 light vehicle dealership outlets supported just under two million jobs across the country. The sector was spearheaded by companies such as AutoNation and the Penske Automotive Group, which reported approximately 25.8 and 25.6 billion U.S. dollars in annual revenue in 2021.
Price inflation affected new vehicles as well and was reported across manufacturers. In December 2021, the average price of Toyota Motor Corporation’s vehicles had risen by just under 3,000 U.S. dollars. Toyota vehicle supplies—which included the best-selling sport utility vehicle between January and August 2022— were projected to last under 21 days as of June 2022, with all sales remaining constant. Tight supply remained an issue for many other Asian and European brands, including Lexus and Mercedes-Benz. The popularity of American brands in the U.S. market could partly be linked to their more extensive vehicle inventory as of June 2022.
In a 2021 survey, 23 percent of U.S. car shoppers reported intending to buy their next vehicle partially or fully virtually. Convenience and ease of use were the leading reasons behind virtual car acquisition in the country, while only eight percent mentioned a desire to avoid dealers. In 2021, over 90 percent of U.S. consumers across age groups were willing to use the internet to apply for car financing. This increased openness to online car sales contributes to the market changes impacting U.S. auto dealers.
With 48 percent of U.S. consumers intending to buy an automobile as of March 2022, the U.S. light vehicle market is becoming more competitive for auto dealers. As of January 1st, 2022, about 18,230 light vehicle dealership outlets supported just under two million jobs across the country. The sector was spearheaded by companies such as AutoNation and the Penske Automotive Group, which reported approximately 25.8 and 25.6 billion U.S. dollars in annual revenue in 2021.
Price Inflation Challenges Dealerships
With a product range priced well below new vehicles, used vehicle sales are gaining momentum in the United States, accounting for almost 36.7 percent of sales at franchised dealerships in 2021. As of 2020, the average American household spent some 4,500 U.S. dollars on vehicle purchases annually, and used vehicle financing options tend to be more affordable than new vehicle financing options. However, while the used vehicle market presents advantages for consumers, dealerships must contend with inflation. While prices for used cars remain more affordable than new ones, the global chip shortage resulting from the COVID-19 pandemic has depleted used vehicle stocks. The average list price of used vehicles in the U.S. reached over 28,200 U.S dollars in June 2022—an increase of around 15 percent year-over-year. By mid-2022, most used vehicle retail inventory was priced at 35,000 U.S. dollars or above.Price inflation affected new vehicles as well and was reported across manufacturers. In December 2021, the average price of Toyota Motor Corporation’s vehicles had risen by just under 3,000 U.S. dollars. Toyota vehicle supplies—which included the best-selling sport utility vehicle between January and August 2022— were projected to last under 21 days as of June 2022, with all sales remaining constant. Tight supply remained an issue for many other Asian and European brands, including Lexus and Mercedes-Benz. The popularity of American brands in the U.S. market could partly be linked to their more extensive vehicle inventory as of June 2022.
Customers Have Begun to Embrace Online Sales
Customer satisfaction with dealerships had increased at the onset of the pandemic before dropping in 2021. This particularly affected used car buyers, whose satisfaction with their overall shopping experience dropped by six percentage points. This change in car buyer satisfaction is one of the factors leading consumers to diverse ways of connecting with dealerships. The U.S. online car dealers market has been steadily increasing throughout the COVID-19 pandemic and is forecast to reach a size of 45.1 billion U.S. dollars in 2022. Some leading global online car retailers were U.S.-based companies, including CarMax and Carvana. While CarMax is losing popularity compared to physical dealerships such as AutoNation and Lithia Motors, the brand ranked above Carvana—one of its main online competitors—in 2021.In a 2021 survey, 23 percent of U.S. car shoppers reported intending to buy their next vehicle partially or fully virtually. Convenience and ease of use were the leading reasons behind virtual car acquisition in the country, while only eight percent mentioned a desire to avoid dealers. In 2021, over 90 percent of U.S. consumers across age groups were willing to use the internet to apply for car financing. This increased openness to online car sales contributes to the market changes impacting U.S. auto dealers.
