Detroit-based automotive retail consulting firm, Urban Science, announced that 1,467 U.S. car dealerships closed during the first 10 months of this year, leaving 18,617 auto dealerships in operation as of Nov. 1, 2009. This follows 2008’s net loss of 881 dealerships (a 4.2% decline in dealership count). “Honk if You Need Land: Vacant Car Lots Piling Up,” Rick Breuer of SRS Real Estate Partners’ Automotive Practice Group estimated that the average U.S. auto dealership is comprised of a 15,000 to 18,000-square-foot sales / service building situated on four to five acres. When applied to the 1,467 closures Urban Science cited, this translates into at least 22 million square feet of vacant dealership buildings and at least 5,900 acres of vacant auto lot land added to the vacant retail landscape this year.
With “normal attrition” in the industry typically about 1%, “the closures represent the worst on record and reflect a 7.3% loss in the nation’s dealer count,” said Urban Science. The firm said the closures are primarily the result of General Motors and Chrysler consolidating dealership locations, with the two automakers accounting for 90% of the closures.
“While OEM bankruptcies and bad economic times drove the closures, all dealers have to deal with a market that has dropped from several years of 17 million in sales to somewhere around 11 million,” said John Frith, vice president of retail channel solutions, Urban Science.
In an April 2009 article published by CoStar,
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