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2006 Auto Sales Eighth Strongest on Record According to NADA DATA
McLEAN, Va. (May 16, 2007)-The nation's franchised new-car and light-truck dealers recorded their eighth strongest year on record in 2006, selling more than 16.5 million vehicles, down from 16.9 million in 2005, according to NADA DATA, a comprehensive annual analysis compiled by the National Automobile Dealers Association (NADA).
In 2006, vehicle sales continued to be driven by generous incentives, such as cash rebates, competitive pricing and attractive financing and lease options, as well as U.S. employment gains. However, higher energy prices, resulting from escalating tensions in oil-producing regions, caused consumer concern that somewhat tempered the sales pace.
According to the NADA DATA report, light trucks outsold cars in 2006 for the sixth consecutive year, 8.7 million to 7.8.million respectively, but the gap closed somewhat. Light trucks made up 53 percent of total new-vehicle sales in 2006, down from 55 percent in 2005.
Crossover Utility Vehicles (CUVs), small cars and large domestic sedans led the gains in sales last year, growing by 9.1 percent, 4.7 percent and 1.8 percent respectively. In contrast, pickup trucks fell 10.6 percent and SUVs dropped 11.7 percent for the year.
NADA Chief Economist Paul Taylor, who has earned a reputation as one of the most accurate auto sales analysts in the country, projects that overall light-vehicle sales in 2007 will hold steady at nearly 16.5 million units.
“Strong car and CUV sales result from many attractive new products and quality customer service provided by franchised new-car dealers,” said Taylor. “Customer incentives appear to be rising along with the stock market, and that should help sales in the second half of 2007. Interest rates will remain stable, and that will help sustain light-vehicle sales. But higher gasoline prices will change the mix of vehicle selling, which will be led by sedans and CUVs once again."
On the used-car front, franchised new-vehicle dealers sold more than 19 million units in 2006. Of these, 11.5 million were retailed and 7.7 million wholesaled. New-car dealers acquired 51 percent of their used units from trade-ins and 49 percent from auctions, street purchases and other sources.
Used light-vehicle sales by franchised dealers should hold steady in 2007, due in part to employment gains by households, along with a modestly growing economy.
Additional highlights from NADA DATA include:
- The average retail selling price of a new vehicle increased to $28,451 in 2006, from $28,381 in 2005.
- The average used-vehicle transaction price at dealerships rose to $15,518, from $14,923.
- The average dealership annual payroll was $2.5 million in 2006, up from 2.4 million in 2005.
- The total industry payroll was $52.9 billion, up more than $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 295, to a total of 21,200, 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 31 percent in 2006.