Annual NADA DATA Report: Auto Retail Industry Maintains Strength in 2003

Moderate Sales Growth Expected in 2004

MCLEAN, Va., May 11 -- The nation's franchised new car and truck dealers recorded their fifth strongest year on record in 2003, selling 16.6 million vehicles at a total sales volume of nearly $700 billion, according to NADA DATA, a comprehensive annual analysis compiled by the National Automobile Dealers Association (NADA).

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.

Major incentive programs, enhanced dealership services, increased product quality and a recovering economy contributed to the industry's relatively strong performance. Sales were highest during the third quarter, when the nation's GDP grew a healthy 8 percent.

According to the NADA DATA report, the light truck category continues to grow, accounting for a record 54 percent (9 million) of total light vehicle sales in 2003 -- up from 52 percent in 2002. Sales of Crossover Utility Vehicles, based on car platforms, soared 35 percent in 2003, earning the lion's share of growth in the light truck segment. Rising van and pickup sales also helped to boost light-truck sales for the 11th consecutive year, as business spending returned to the market.

NADA Chief Economist Paul Taylor projects that 2004 light vehicle sales will climb to 16.8 million units. "With the economy gaining momentum and incentives continuing, conditions are favorable for modest growth over last year's sales total," said Taylor. "Interest rates and gas prices are variables to watch. Indications are that interest rates will edge up through the course of the year, though not spike dramatically. Gas prices are in the consciousness of many Americans, but unlikely to reach levels nationally that will significantly impact buying decisions on a broad scale. However, subtle changes could occur if consumers start to believe that the high prices at the pump are a permanent reality, rather than just a short-term spike." NADA believes that gas prices will recede in the late fall.

On the used car front, sales by franchised new vehicle dealers in 2003 were 19.5 million, up slightly from 19.4 million in 2002. Of these, 11.7 million were retailed and 7.8 wholesaled.

  Highlights from the 2004 NADA DATA include:

  *  The average retail selling price of a new vehicle increased 5.4 percent

     in 2003 to $27,550; the average used vehicle price fell 2.5 percent to
     $13,500;

  *  The average dealership annual payroll was $2.31 million, a $67,000
     increase over 2002; the total industry payroll was $50 billion, up $1
     billion, representing nearly 11 percent of the nation's total retail
     trade payroll;

  *  Moderate consolidation in the number of franchised new vehicle dealers
     continued in 2003, with the net dealership count dropping by 75 to
     21,650;

  *  Auctions continue to make inroads as source of used cars, from less
     than 10 percent in the early 1980s to 34 percent in 2003.

The National Automobile Dealers Association, founded in 1917 and based in McLean, VA, represents approximately 20,000 franchised new car and truck dealers holding nearly 43,000 separate franchises, domestic and import.