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2006 Auto Sales Eighth Strongest on Record; Dealer Ad Spend Up

U.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, an annual analysis compiled by the National Automobile Dealers Association.

For the sixth consecutive year light trucks outsold cars, 8.7 million to 7.8.million, but the gap closed somewhat from 2005 levels: Light trucks made up 53% of total new-vehicle sales in 2006, down from 55% in 2005.

New-car dealers spent some $7.8 billion on advertising in 2006, with each dealership spending nearly $365,000, on average, according to NADA.

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Ad expenditures per new vehicle were up 2% from 2005, averaging $590.

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Among the advertising related findings from the report:

  • On average, each dealer spent 11.5% of ad dollars on internet advertising, up from 9.9 percent in 2005 and 6.7% in 2004.
  • Newspapers accounted for the plurality of ad expenditures (27.3%), though 10 years earlier they accounted for 52.2%.
  • Television accounted for 19.5% of ad dollars, followed by radio at 18.1%.

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Also according to the NADA DATA report:

  • Crossover utility vehicles (CUVs), small cars and large domestic sedans led the gains in new-vehicle sales last year, growing 9.1%, 4.7% and 1.8%, respectively. In contrast, pickup truck sales fell 10.6% and SUVs dropped 11.7%.
  • 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% of their used units from trade-ins and 49% from auctions, street purchases and other sources.
  • 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 - and accounting for nearly 14% 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% in the early 1980s to 31% in 2006.
Jun 7-07
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