DETROIT – The number of U.S. car dealerships is rising again after thousands of closures during the recession.
Its another sign of strength for the car industry, which has been seeing steady sales increases over the last few years despite the wobbly recovery.
Its also good news for the economy, because new car dealerships typically employ about 53 people, according to the National Auto Dealers Association.
There were 17,767 U.S. dealerships at the end of 2011, or 108 more than at the end of 2010, according to a report last week by Urban Science, a consulting firm.
In a typical year, the number of dealerships falls by 2 percent because of retirements and downsizing, so a rise is fairly significant.
The two largest contributors to the increase were Fiat, which added 135 dealerships, and Chrysler, which added 50.
California saw the most dealership openings, with 31. New Jersey was next with 10.
Its a reversal from the downturn, when General Motors – which has a truck plant in Allen County – and Chrysler filed for bankruptcy protection and shuttered hundreds of dealerships as part of the process. Some Ford Motor Co. dealers were also forced to close when Ford stopped selling its Mercury brand.
Other dealers closed because banks froze up and they couldnt get financing. Urban Science said 3,306 dealers closed from 2008 to 2010.
We have a stabilized, right-sized dealership network that has increased year-over-year for only the second time since we started this census, said John Frith, the vice president, of Urban Science. Automakers and dealers are in a good, profitable position.
The dealerships that held on and stayed open during the recession are more profitable. U.S. dealers are on track to have a record number of sales per dealership this year, Urban Science said. Sales per dealership increased 10 percent to 719 in 2011, which is approaching the current record of 784 in 2005.