GARDEN CITY, N.Y. — Automotive dealers expect to increase in sales in 2013, according to a new survey from Chase Auto Finance. Titled, Chase Auto Finance Dealer Survey, results revealed dealer expectations for hiring, financing, auto industry trends and the U.S. and local economies.
The study found an overwhelming majority of dealers believe the auto industry and their own dealership businesses are improving and primed for growth, with nearly half (45 percent) of dealers surveyed indicating that they expect sales growth between 5 to 10 percent this year. Twenty-two percent of respondents said they expect sales to increase 11 to 15 percent, while an additional 10 percent anticipate sales to increase 16 to 20 percent. Five percent of dealers said they are planning for sales to grow 20 percent or more.
Specifically, auto dealers expect new and pre-owned sales growth in 2013, with two-thirds (67 percent) of respondents indicating that they anticipate new sales to increase, while 73 percent of dealers expect growth in pre-owned sales. Additionally, dealers expect healthy increases in service sales (49 percent), service contract/warranty sales (48 percent) and leases (42 percent).
Additionally, more than half of dealers (57 percent) say the sedan will be the top-selling type of automobile in 2013. Trucks (17 percent) are a distant second, followed by crossover vehicles (13 percent) and SUVs (9 percent). The trends look similar for fleet sales, which are an important indicator for economic growth. Dealers who also participate in fleet sales (44 percent) said the sedan is expected to fuel sales growth (53 percent), followed by trucks (47 percent), crossover vehicles (20 percent) and SUVs (20 percent).
Looking at the economy’s impact on their stores, more than three in four (77 percent) dealers surveyed said they believe their dealership business is improving, and 68 percent believe the economy in their local community is strengthening. As for the national economy, nearly a third of dealers (32 percent) believe the national economy will start getting better later this year, and more than half (52 percent) said not until after 2013.
“Automobile purchases continue to be a leading indicator of economic activity, and our survey reveals solid optimism for growth in 2013,” said Marc Sheinbaum, CEO of Chase Auto Finance. “Buying or leasing a new car is an investment that individuals and companies make not only by necessity, but also when they feel good about the stability of their financial future. These results affirm what we saw in the second-half of 2012 and have already seen in 2013: Sales are improving and dealers are investing in their businesses and hiring more people as they prepare for growth.”
More than 60 percent of dealers polled said they are likely to expand their inventory in the next six months. As dealerships expand, they also expect to create more jobs. Of the more than three in five (62 percent) dealers who say they are “very” or “somewhat” likely to expand their payrolls in 2013, more than a third (35 percent) say they expect to hire three to five full-time employees this year. Additionally, nearly three in ten (28 percent) expect to hire more than six employees, while 28 percent expect to hire one or two employees.
While dealers are looking to hire and expand inventories, they are less likely to seek financing to fund their expansion plans. More than six in ten dealers (65 percent) say they are “somewhat” or “very” unlikely to seek financing. Of the 27 percent who will seek financing to increase their floorplans, one in four (29 percent) will expand their dealerships or remodel their existing facilities.