Second year of growth in U.S. dealership count, franchises dip slightly

According to research by auto marketing company Urban Science, the number of U.S. dealerships grew for the second consecutive year, despite a slight decline in the number of franchises.

The study, published on Tuesday, found the total number of retail locations had increased by 27 stores to a total of 18,257 by January. California’s car business expanded the most, with 25 new storefronts, while the dealership count in Texas and Virginia increased by nine and five respectively. Michigan’s market shrank by nine stores, the most for 2022, followed closely by Indiana and Minnesota. The data also showed a minuscule decrease in the number of franchises, which were down 0.29% to a total of 31,554. Throughput also decreased by 8%, falling from 826 to 759 units.

“Despite the overall decrease in sales in the U.S. in 2022, there are reasons for optimism as non-retail and EV sales continue to climb." - Mitch Phillips, Director of Global Data and Analytics, Urban Science

While statistical changes in the number of U.S. dealerships were minimal, the lack of noticeable shifts suggest that the efforts of retailers to adapt to the market were largely successful. Although challenges, such as supply chain disruptions and affordability, caused vehicle sales to drop to a ten year low in 2022, and are likely to impact numbers in the coming months, storefronts are in a good position to recover. Urban Science expects the industry’s stability will allow light-vehicle sales to increase 8% by the end of the year to a total of 15 million, with a throughput of 818 units. The auto marketing company believes that some of this growth will be driven by electric vehicles. While still a niche segment, EV adoption has grown at an accelerating rate, presenting great possibilities for the industry in 2023.

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