Donna Harris  |  Automotive News  |  August 24, 2011

The U.S. dealership population grew by 66 rooftops in the first half of 2011, putting the industry on track for its first annual increase in more than a decade, a new study shows.

The count jumped 0.4 percent from the start of the year to 17,725, according to data released today by consulting firm Urban Science. The annual tally last rose in 2000 and before that 1990, the year Urban Science began tracking the data.

Urban Science normally takes its census at the end of each year but added a six-month count in 2011 because it sensed the trend might have reversed after plunges in the prior two years.“The steep decline has stopped, and we’re seeing some stability,” said John Frith, vice president of retail channel solutions at Urban Science.

Since 1990, the number of automotive retail stores dropped about 1 to 2 percent a year, but the number fell sharply in 2009 and 2010 with the recession and the bankruptcies of General Motors and Chrysler. Between December 2008 and December 2010, the number of dealerships fell 10 percent to 17,659.

Some manufacturers, such as Chrysler, have added dealerships in metro areas as sales rebounded to “right-size” their networks, Frith said. In the first half of this year, the number of metropolitan dealerships grew slightly, while rural dealerships dipped slightly.

He predicted further stability for the “next year or two,” then a return to the gradually declining trend in the number of dealerships.

More sales per dealership

In addition, new-vehicle sales per dealership, also known as throughput, have increased as sales have climbed.

Given the 17,725 dealerships as of July 1 and assuming 2011 U.S. light-vehicle sales come to 12.6 million units, as forecast by J.D. Power and Associates, Urban Science says average annual sales per dealership now stand at 711 units, the highest since 2007 when higher sales industrywide were shared among more dealerships.

The higher throughput implies higher profits for the remaining dealerships. Said Frith: “I think the dealers in general are in better shape to weather another downturn if there is one.”

Average throughput per dealership was 771 in 2007. The figure tumbled to 660 in 2008, 564 in 2009, and 656 in 2010.