December 22, 1998 (The Editor’s Desk is updated each business day.)

Auto dealers are fewer, bigger, and employ more workers

New and used car dealerships are a fiercely competitive, cyclically sensitive segment of retail trade.  After reaching a trough in 1982, the number of employees in auto dealerships rose sharply to nearly 1.1 million in 1997.  During the same period, though, the number of dealerships remained stable.  As a result, the average dealership today is bigger, has more employees, and sells more cars.

[Chart data—TXT]

In 1996, slightly more dealers sold 750 cars or more annually than sold fewer than 150 cars per year.  Twenty years before, there were four times as many very small dealers than very large.

Two related factors have driven this change in the auto retailing industry: the rising popularity of new-car leasing and the appearance of the high-volume car "superstore."  New car leases usually run 2 or 3 years, after which the vehicles become part of a large pool of used cars for sale, providing the stock for car "superstores."  Competing with the volume selling strategy of the superstores has been one of the primary factors behind the consolidation of traditional dealerships.

The employment data in this release are a product of the Current Employment Statistics program. Additional information is available from "Auto retailing: changing trends in jobs and business, " Monthly Labor Review, October 1998.