U.S. dealerships grew for 2nd year in a row, annual franchise report says

The number of U.S. franchised dealerships in 2022 rose for the second year in a row after two years of declines, according to Urban Science’s annual Automotive Franchise Activity Report.

There were 18,257 new-vehicle dealerships as of Jan. 1, 2023, up 27 stores from 2022, according to Urban Science’s report, released Tuesday.

Urban Science found California added 25 dealerships, Texas added nine and Virginia added five, representing the states with the most dealership gains. Michigan lost the most stores with a decrease of nine dealerships, while Indiana lost seven and Minnesota fell by five.

While the number of dealerships increased, Urban Science said the number of franchises declined slightly. Urban Science said as of Jan. 1 there were 31,554 franchises, down 0.29 percent. The number of franchises fell 1 percent in 2021 to 31,646.

Amid lower vehicle sales and inventory shortages, the average number of new vehicles sold by U.S. dealerships, known as throughput, declined in 2022 by 67 to 759, Urban Science said.

Annual U.S. light-vehicle sales ended at 13.9 million units in 2022, down 8 percent from 2021, according to the Automotive News Research & Data Center.

Urban Science, citing a sales forecast of 15 million new vehicles this year, estimated a throughput of around 818 units in 2023 “barring any unforeseen circumstances.” That would reflect an increase of nearly 8 percent.