Automobile Dealers Industry Profile

Companies in this industry engage in retail sales of new and used passenger cars, light trucks, SUVs, and passengers and cargo vans. Major companies include AutoNation, CarMax, Group 1 Automotive, Penske Automotive Group, and Sonic Automotive (all based in the US), as well as Inchcape plc (UK), Jardine Cycle & Carriage (Singapore), Pang Da Automobile Trade (China), and Porsche Holding Salzburg (Austria).

Worldwide automobile sales grew to around 75 million automobiles in 2023, up from around 70 million units in 2022, according to Statista. China is the largest automobile market based on sales with around 25.8 million units in 2023, while monthly car sales fell in April 2022 due to shortages, fears over a looming recession, and the country grappling with the COVID-19 pandemic.

The US automobile dealer industry includes about 50,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $1 trillion.

COMPETITIVE LANDSCAPE

Consumer spending and interest rates drive demand for cars. The profitability of individual companies depends on the volume and mix of cars and services sold. Large companies can offer a wider selection of cars and have advantages in marketing, purchasing, and finance. Small companies can compete effectively by offering superior customer service or service a local market. The US industry is highly fragmented: the 50 largest firms generate about 20% of revenue.

For vehicle sales, auto dealers compete with private market sellers, who are ...