DETROIT – The number of franchised car dealerships and their owners is expected to decline dramatically in the coming years.
That’s the prediction of Mark O’Neil, chief operating officer of Cox Automotive, a company with brands that include AutoTrader, Manheim auctions, Kelley Blue Book and Dealer.com.
Currently, there are about 16,800 dealerships or “rooftops,” about 2,000 fewer than a decade ago, according to the National Automobile Dealers Assn.
As the age of mobility evolves and the advent of self-driving cars approaches, fewer personal vehicles are expected to be sold. The number of dealerships will drop accordingly, predicts a Cox corporate-strategy study.
It anticipates 9,000 rooftops selling an average of 930 vehicles a year (or throughput) by 2034.
As dealer groups acquire more individual stores, the number of owners will fall, too, O'Neil says. “There are about 9,000 owners now. By 2030, we think there will be 1,000. That’s drastic.”
He adds: “As groups consolidate, rooftops close. Single-point urban dealers are at high risk.”
O’Neil cites a prediction by Tony Seba, a principal at the think tank Rethink, who says: “By 2030, 95% of all U.S. passenger miles will be served by transport-as-a-service providers who will own and operate fleets of autonomous electric vehicles.”
Shifting future dealership business could focus on offering vehicle-subscription services and repairing and maintaining mobility fleets, O’Neil says at a Cox media event here, the epicenter of the U.S. car industry. “All of us have to adopt business models for this new environment.”
Average household vehicle ownership could drop from two to one, he says. “People would have the need for two cars, but they would only own one. They would turn to ride-sharing or subscription services for the other.”