East Penn Press

Saturday, December 16, 2017

New vehicle dealership sales exceeded $2.9 billion in 2016

Friday, August 11, 2017 by The Press in Business Showcase

Sales for franchised new vehicle dealerships in the Greater Lehigh Valley exceeded $2.9 billion in 2016, an average of $48.2 million per dealership.

New vehicle revenue contributed $26.4 million to that total, while pre-owned vehicles contributed $12.8 million. Service, parts and other revenue sources made up the remainder.

The average dealership sold 1,432 new and used vehicles in 2016, and serviced an average of 18,800.

The Greater Lehigh Valley Auto Dealers Association announced the results July 31 of its most recent Automotive Industry Economic Impact Study prepared by Auto Outlook, Inc., an independent automotive market analysis firm.

The results of the study show a significant increase in the economic impact of the association’s membership: franchised new car dealerships. Dealership employment in 2016 was 3,782, a 48 percent increase compared to 2011, when dealerships employed 2,550.

Jobs in the area attributable to franchised new vehicle dealerships were 5,682. The average number of jobs per new vehicle dealership was 62.

Including direct and indirect employment, automobile dealership operations accounted for 14 percent of retail employment in the area. Within dealerships, 35.5 percent of staff members were employed in service and 30.6 percent in new and used vehicle sales.

“The member dealers of the Greater Lehigh Valley Auto Dealers Association provide employment to thousands of residents and support countless businesses through our purchase of goods and services from local vendors,” said Sam Borelli, auto dealers association board president.

“Though small businesses individually, when combined together our dealers are a powerful economic force, now the third largest workforce in the region,” Borelli said.

There was a reported 76 percent shortage of service technicians and 63 percent reported shortages of sales associates.

Dealerships paid their employees $226,310,000. This represented a 72 percent increase compared to 2011 when employee compensation was $131,250,000. When fringe benefits are included, the amount rose to $341.7 million. The average dealership payroll was $3,390,000. Including fringe benefits it increased to $3,710,000.

Health insurance premiums were 14 percent of overall employment costs in 2016. From 2015 to 2016, health insurance premiums rose 15 percent. Employees paid one third of the cost of their health insurance premiums.

In 2016, member new franchised automobile dealerships collected or paid nearly $118 million in state and local taxes, an average of more than $1.9 million per dealership, and an increase of 79 percent in the last five years. Dealers also paid nearly $58 million in Federal payroll taxes.

Advertising expenses for the surveyed year were more than $42 million with one third of that amount spent on the Internet.

Average expenditures on capital improvements were $605,000 in 2015 and 2016.

Dealership contributions to charitable causes were $2.2 million. The Greater Lehigh Valley Auto Dealers Association gave an additional $150,000 to community nonprofits, for a total of nearly $250,000 in charitable grants in 2016.

The Greater Lehigh Valley Auto Dealers Association, founded in 1998, includes 63 new car franchised dealers and produces the annual Lehigh Valley Auto Show. The association also recognizes and educates local automotive technology students.

The study, completed in 2017, is based on data from calendar year 2016. The most recent study completed for comparative purposes was based on calendar year 2011. The study is available on the association’s web site: glvada.org.