Annual NADA DATA Report: 2005 Auto Sales Third Strongest on Record

McLEAN, Va. (May 17, 2006) - The nation's franchised new car and light truck dealers recorded their third strongest year on record in 2005, selling more than 16.94 million vehicles, up from 16.86 million in 2004, according to NADA DATA, a comprehensive annual analysis compiled by the National Automobile Dealers Association (NADA).

The complete report appears in the May issue of NADA's AutoExec magazine.

The healthy pace of new vehicle sales in 2005 was driven by generous incentives, such as cash rebates, as well as the availability of attractive financing rates, lease options and enhanced dealership services.

According to the NADA DATA report, light trucks outsold cars in 2005 for the fifth consecutive year, 9.3 million to 7.6 million respectively, but the gap closed somewhat.  Light trucks made up 54.8 percent of total new vehicle sales in 2005, down from 55.5 percent in 2004.

Large domestic sedans and crossover utility vehicles (CUVs) continued to lead the gains in sales last year, growing by 31 percent and 14 percent respectively.  By contrast, small car sales were up by just 0.8 percent for the year.

NADA Chief Economist Paul Taylor, who has accurately projected annual sales totals for each of the past three years, projects that overall light vehicle sales in 2006 will remain healthy, but edge down slightly to a year-end total of approximately 16.8 million units.

"Strong car sales result from many attractive new products and stout efforts by the nation's franchised new car dealers," said Dr. Taylor.  "Customer incentives and a rebound in the stock market will help sales in the second half of 2006.  Interest rate increases will slow, and that will help sustain light vehicle sales.  But higher gasoline prices will change the mix of vehicle selling, led by large sedans and CUVs once again."

On the used car front, franchised new vehicle dealers sold nearly 20 million units in 2005.  Of these, 11.8 million were retailed and 7.9 million wholesaled.  New car dealers acquired 53 percent of their used units from trade-ins and 47 percent from auctions, street purchases and other sources.  Used light vehicle sales by franchised dealers will see an increase in 2006, due in part to stronger employment gains by households, along with solid economic growth

Highlights from NADA DATA include:

  • The average retail selling price of a new vehicle increased to $28,400 in 2005, from $28,050 in 2004;
  • The average used vehicle transaction price at dealerships rose to $14,925, from $14,250;
  • The average dealership annual payroll was $2.4 million in 2005, up from 2.33 million in 2004;
  • The total industry payroll was $51.5 billion, up $1 billion in a year's period, representing nearly 14 percent of the nation's total retail trade payroll;
  • The number of franchised new vehicle dealerships in the U.S. dropped by 145, to a total of 21,495, from 21,640, reflecting an ongoing moderate consolidation trend;
  • Auctions continue to increase in importance as a source of used cars at dealerships, from less than 10 percent in the early 1980s to 33 percent in 2005.