Larger dealers were the only category to show an increase over 2005 in average net income for the first five months as mid-size and smaller retailers incurred double-digit declines, according to Spader Business Management.
Floorplan interest expenses were up in all three dealer categories, most prominently for midsize retailers which also showed the highest increase in average overall costs during the period.
Larger dealerships, defined as those with annual income over $10 million, posted a 2.3% increase in average net income of $334,212 through May compared with $326,563 last year.
Smaller dealers, those with annual income less than $5 million, incurred a 42.9% decline in average net income for the first five months at $32,149 versus $56,282 last year. Mid-size dealers with annual income between $5 million and $10 million were down 21.7% from a year ago with an average net income of $127,552 compared to $162,967.
Average total sales through May were essentially flat for all three categories, including: larger dealers were up 2.8% to nearly $8 million; midsize dealers increased 4.3% to $3.3 million; and smaller dealers were down 6.3% to $1.5 million.
Other highlights include:
• Average new inventory levels through May were comparable with last year for all three dealer groups.
• Larger dealers increased average new unit sales for the first five months by 2.9% to $5 million while used sales were down 1.9%.
• Mid-size dealer saw a 3.3% gain in average new unit sales to $2.1 million compared with the same period last year while used sales were flat at $509,430.
• Average new units sales through May for smaller dealers declined 9.9% to $899,785 from $999,076 a year ago while the used market declined 5%.