Changes in sales structure and profits of US car dealers since 2006

In the first quarter of 2010, the American Automobile Dealers Association spent $54,000 to lobby the U.S. government to fight for the rights of U.S. car dealerships, including keeping American car dealers free from new consumer protection laws. Then, what is the operating situation of the US car dealers? Gasgoo.com makes a brief analysis of sales and profit data from US dealers issued by the American Automobile Dealers Association.

Net profit rate is often 1.5% This year it suddenly rises to 2.29%

In the two years of 2008 and 2009, the overall sales of US car dealers fell by 14.56% and 7.50% year-on-year, respectively, and gross profit also declined by 10.31% and 1.41% respectively. It can be seen that in the past two years, the US auto market has fallen into a downturn and the impact of car dealers cutting down dealerships and closing some brands.

However, the U.S. car dealers' (pre-tax) net profit for the past two years did not decrease continuously, but after a year-on-year decline of 45.48% in 2008, the year-on-year increase in 2009 was 43.68% to US$398,067.

From 2006 to 2009, except for 2008, the U.S. auto dealers' net interest rate was about 1.5%. In 2008, its net interest rate was only 0.97%.

After the U.S. auto market began to recover, U.S. dealers’ sales, gross profit, and net profit all increased over the same period of last year from January to April. In particular, the net profit has reached US$215,760, an increase of 127.22% over the same period of last year. . As a result, the January-January net interest rate has risen to 2.29%. It can be seen that although the US automobile dealers experienced a financial crisis and the auto market was shrinking, their profitability gradually increased.

The proportion of new car sales in sales has dropped to 50.6%

Most of the sales revenue of US car dealers comes from new car sales, followed by used car sales, and a small portion of revenue comes from service and auto spare parts sales. However, the proportion of new car sales is declining, and the proportion of the other two revenues is increasing.

In 2006, 59.0% of US car dealers’ sales revenue came from new car sales, after which the proportion decreased year-on-year, and dropped to 50.6% as of January-April this year.

The proportion of used car sales has increased from 29.1% in 2006 to 34.7% in January-April this year, while the proportion of service and spare parts sales has also increased from 11.9% to 14.7%.

Gross profit of second-hand bicycle sales rose from 11% to 14%

The gross profit and gross profit of bicycles sold by US car dealers for used cars are significantly higher than those for new cars (see Table 1). From 2006 to 2009, the gross profit rate of bicycle sales of new cars has dropped from 5.21% to 4.49%, and the lowest time (2008) was only 4.43%. Although the gross profit of new bicycle sales in January-April this year rose to 4.69%, it is still far from the level before the financial crisis.

Table 1: Average gross profit of bicycle sales by American automobile dealers (unit: US$) 2006 Full Year 2007 Full Year 2008 Full Year 2009 Full Year 2010 January-April New Car 1,482 1,442 1,257 1,301 1,386 Used Cars 1,776 1,778 1,633 1,721 2,249 Source: Gasgoo.com, American Automobile Dealers Association

While the gross sales of second-hand bicycle sales dropped to a low point (10.74%) in 2008, its gross margin level in 2009 exceeded the level before the financial crisis (11.44% and 11.31% in 2006 and 2007 respectively), reaching 11.49. %. From January to April this year, the gross profit of second-hand bicycle sales rose further to 14.20%.

summary:

1. After experiencing the financial crisis and the downturn of the auto market, the sales revenue and profits of US auto dealers began to recover, especially the fastest increase in net profit.

2. The proportion of new car sales in U.S. dealers' sales revenue has been reduced to 50.6% year-on-year, and the contribution rate of used cars and services and spare parts to their sales revenue has reached nearly half.

3. The profit rate of used car sales has reached 14.20%, far exceeding the level before the financial crisis. The profit rate of new car sales is far from being restored.