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PRESS RELEASE

Dealers Assn Says Dealers Make Half a Trillion on New Cars

19 March 1997

New-Car Dealerships' Revenue Tops the Half-Trillion Mark, NADA Finds

    WASHINGTON, March 17 -- The nation's franchised new-car
dealerships recorded revenue of a record one-half trillion dollars in 1996,
according to the National Automobile Dealers Association.  That revenue was
based on more than 15 million new-vehicle sales, 19 million used-vehicle sales
and significant increases in parts and service business.  Overall, the average
dealership's net profit before taxes rose from 1.4 percent to 1.5 percent in
1996.
    The average transaction price of a new vehicle reached nearly $22,000 in
1996, while the average selling price of a used vehicle hit $11,600.  However,
the association's members reported continued pricing pressures in both new-
and used-vehicle sales, including a particularly significant margin squeeze
for used vehicles in the $11,000 to $14,000 price range.  As a result, profits
in the new-vehicle department were up only slightly for the average
dealership, while used-vehicle department profits dropped to 1.6 percent from
2.1 percent in 1995.  The average dealership made only $77 on each new vehicle
sold versus $259 profit per used vehicle retailed, including income from
financing and the sale of insurance.
    The service and pads department in the average dealership reported a 10
percent increase in dollar sales and a boost in profit margin to 6 percent
from slightly more than 5 percent in 1995.
    The National Automobile Dealers Association represents 19,500 franchised
new-car and -truck dealers holding nearly 40,000 separate franchises, domestic
and import.

SOURCE  National Automobile Dealers Association

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CONTACT: Donna Reichle of the National Automobile Dealers Association, 703-827-7407,
or fax, 703-821-7075