The number of U.S. new-vehicle dealerships fell from 18,294 in 2018 to 18,195 at the start of 2020, marking the first decline since 2013, according to the annual Automotive Franchise Activity Report.
U.S. dealership throughput, the average number of new-vehicles sales per dealership, also fell, to 940 in 2019, a decrease of eight units from 2018, according to the report produced by research firm Urban Science.
That 0.5 percent decrease “is small and still indicates continued stability overall,” the report said.
California posted the biggest decrease in dealerships in 2019, down 28 to 1,478, followed by Illinois with nine fewer, and Ohio and Missouri with seven fewer each.
Texas saw the most growth, with 11 new dealerships in 2019, followed by North Carolina with four, and Pennsylvania and Tennessee with three new dealerships each.
The report found that 96 percent of the U.S. dealership networks showed virtually no net change.
“California used to be always most actively adding dealers,” Mitchell Phillips, global director of data at Urban Science, told Automotive News. “This is a big state and they lost a lot of dealerships.”
The state also had the largest decline in sales of any state in 2019, Phillips said, with a decrease of 6 percent.
If the state was left out of the U.S. dealership throughput calculation, Phillips said, “it would probably be higher because the numerator is so large in California and it declined more than the nation did. … The question is if California will go against the rest of the nation or will it go with the same trend?”
Phillips said not one brand specifically but various brands closed stores in the state last year. “It seemed to be everybody,” he said.
Average industry throughput is expected to drop 14 units in 2020 based on current sales forecasts, Urban Science said.