Annual NADA DATA Report: Auto Retail Industry Resilient in 2002

Relative Strength Expected to Continue in 2003, 2004

MCLEAN, Va., May 15 -- The nation's franchised new car and truck dealers overcame a weak economy and geopolitical uncertainty to sell 16.8 million vehicles in 2002 -- the fourth strongest sales year on record, according to NADA DATA, a comprehensive annual analysis compiled by the National Automobile Dealers Association (NADA). The total dollar volume of 2002 franchised dealership sales was $679 billion, or an average of $26.3 million per dealership.

The complete report appears in the May issue of NADA's AutoExec magazine. It can also be accessed or downloaded online at www.nada.org.

A robust December, major incentive programs, and product and sales quality contributed to the industry's historically strong performance. According to the NADA DATA report, light trucks are growing in popularity, accounting for 52 percent (8.7 million) of total light vehicle sales in 2002 -- a record for that segment. Crossover Utility Vehicles, based on car platforms, grew 23 percent in 2002, providing most of the growth within the light truck market.

NADA Chief Economist Paul Taylor projects that 2003 light vehicle sales will be approximately 16.3 million. "We expect a fifth consecutive year of sales above 16 million units," said Taylor. "That's remarkable during this period of economic weakness and global uncertainty. Prior to this string of strong years, sales topped 16 million only one year in the industry's history (1986)."

"The strong sales trend can be attributed to five main factors: (1) customer incentives; (2) low interest rates; (3) product quality; (4) more efficient dealership management; and (5) dealer improvements in the car-buying experience," Taylor added.

  Taylor estimates that sales will exceed 16 million units again in 2004.

  Highlights from the 2002 NADA DATA include:

  * The average retail selling price of a new vehicle increased 1.4 percent
    in 2002 to $26,150;

  * The average dealership payroll was $2.45 million, a $42,000 increase
    over 2001, while total dealership employment held steady at 1.13
    million;

  * The consolidation trend for franchised dealerships slowed in 2002, with
    the net dealership count dropping by 75, compared to a decline of 350
    last year;

  * Auctions continue to make solid gains as a source for used vehicle
    inventory, at a record 36 percent of the total in 2002, compared to less
    than 10 percent in the early 1980s.

NADA represents more than 19,700 new car and truck dealers, with over 43,000 separate franchises, both domestic and import.