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NADA: April Dealer Sales

23 July 1998

Rising Vehicle Sales Boost Dealer Profitability, Productivity

    WASHINGTON, July 23 -- Strong new-vehicle sales led to an 8
percent rise in dealership revenue and a 35 percent increase in pre-tax dealer
profits in April, according to the National Automobile Dealers Association.
    Contributing to the strong performance was a 9 percent reduction in
advertising spending as dealers correctly anticipated that a record level of
incentives would bring customers into showrooms.
    The soaring sales also led to a dramatic increase in dealership
productivity, as the number of new retail deliveries per salesperson rose 12
percent from March and 5 percent year-to-date.  Total revenue generated per
new-vehicle department employee rose 13 percent for the month and was up 7
percent for the year.
    The positive productivity and expense figures made up for a 13 percent
drop in finance and insurance income to yield a net profit of $171 per new
vehicle retailed.  Net profit per new vehicle retailed in the first four
months of 1998 was $48.
    The National Automobile Dealers Association represents more than 19,500
franchised new-car and -truck dealers holding nearly 40,000 separate
franchises, domestic and import.