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Dealerships improve financially in 2010, report finds

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June 22, 2011 — New-vehicle dealerships improved financially in 2010 despite a slow economic recovery, according to a recent National Automobile Dealers Association (NADA) report on the state of the auto industry.

Net profitability before taxes increased to 2.1 percent, compared to 1.5 percent in 2009, the report said. New and used sales per dealership on average increased about 19 percent and 21 percent respectively and annual payroll also grew.

“New-car dealerships improved their profitability in 2010 through strict cost control, such as reducing rent and real estate costs, cutting advertising expenses and maintaining lower floorplan costs,” said Paul Taylor, chief economist for NADA. “However, the difficult economic recovery and brands leaving the marketplace caused 760 dealerships to close in 2010.”

The report also found that sales of at medium and heavy-duty truck dealerships increased by 9 percent in 2010, as inventories of goods for transport increased throughout the U.S.

For the full report, click here.

NADA represents nearly 16,000 new-vehicle dealerships operating in roughly 32,500 domestic and international franchises.

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