New-car stock rose in 2022 however the common variety of new automobiles offered per dealership fell, in keeping with the Nationwide Vehicle Sellers Affiliation’s 2022 NADA Information report issued in April.

New-vehicle stock reached 1.7 million on the finish of final yr, up greater than 50 p.c from the near-historic low of 1.1 million firstly of 2022. The typical variety of new vehicles offered per dealership fell 8.5 p.c to 819, down from 895 in 2021.

The NADA Information report is a twice-yearly monetary profile of franchised dealerships within the U.S. There have been 16,773 of them on the finish of 2022, in keeping with the report.

“Stock was constrained and that had ripple results all through the entire market,” NADA Chief Economist Patrick Manzi instructed Automotive Information. “It needs to be much less constrained [in 2023] and we must always be capable to promote extra vehicles, so it needs to be good for everyone throughout the business.”

The microchip scarcity will proceed to influence automobile manufacturing in 2023 however not practically as a lot because the final two years, in keeping with the report.

“We count on stock to proceed constructing slowly all through 2023 and attain practically 2.2 million models by year-end,” Manzi stated within the report. “We’re not utterly out of the woods but with respect to the microchip scarcity or different manufacturing enter shortages. However issues are getting higher and that is a web optimistic.”

The 55 p.c year-over-year rise in stock is important, Manzi stated.

“It would not look like that a lot, however stock rising from 1.1 to 1.7 [million vehicles] was a reasonably large accomplishment final yr as a result of the business had simply been so starved for vehicles for therefore lengthy,” he stated. “I used to be stunned by the place gross sales ended up as a result of we really anticipated they’d have been a bit increased firstly of the yr. However once more, stock did not recuperate as shortly as all of us thought in 2022.”

To this point this yr, new-vehicle gross sales and stock are each up, Manzi stated, with 1.8 million mild automobiles on the bottom and in transit to dealership tons.

The typical new-car retail gross sales value in 2022 climbed 9.2 p.c to $46,287, the report discovered.

Inflationary strain all through the provision chain and restricted chip provide helped drive up new-vehicle costs, Manzi stated, noting automakers in lots of instances selected to construct higher-margin automobiles with the obtainable chips.

“Wanting forward into this yr, I feel because the chip provide improves, we’ll see OEMs once more capable of construct extra reasonably priced automobiles, extra entry-level fashions, lower-trim automobiles,” he stated. “Whether or not they do or not, that may nonetheless be up for debate, however I feel the flexibility to try this will enhance because the chip and different provide chain points reduce all year long.”

Inflation continues to be an element, however the business probably will see a much less dramatic year-over-year retail value enhance in 2023, Manzi stated.

Whole gross sales income per dealership in 2022 was as much as $71.9 million from $71 million in 2021. New automobiles represented 49.7 p.c of complete gross sales, with used automobiles accounting for 38.3 p.c and repair and elements gross sales accounting for 12 p.c. These percentages are just like the 2021 breakdown.

Whole gross sales of recent electrical automobiles in 2022, together with direct gross sales by Tesla, Rivian and Lucid, totaled practically 739,000, up 61 p.c from 2021. Franchised sellers’ EV gross sales had been as much as virtually 260,000, accounting for 35 p.c of the brand new EV market by year-end.

Provide chain points proceed to influence EV manufacturing, however Manzi stated the business might see a slight uptick in gross sales this yr, with franchised sellers approaching a 40 p.c share of the phase.

Annual payroll at new-car dealerships final yr was as much as $95 billion from $83.2 billion in 2021.

“Franchised sellers have had fairly good years the previous few years they usually’ve shared that with a lot of their staff,” Manzi stated. “We have additionally seen very excessive inflation charges throughout the financial system that has induced wages to rise throughout all industries, and the dealership business is just not proof against that. There’s a few of these inflation pressures on the dealership as nicely, they usually needed to pay extra to get good employees.”

Whole dealership employment in 2022 was as much as 1.07 million employees, from 1.06 million employees in 2021. The typical variety of staff per retailer was 64 final yr, up from 63 in 2021.

Manzi stated he would not count on to see vital employment cuts.

“There may be the danger of a recession, however I feel that is a reasonably slight threat in the intervening time,” he stated, noting he thinks new-vehicle gross sales will stay pretty robust on account of pent-up demand from fleet prospects primarily but additionally retail prospects.

“With that demand that is nonetheless on the market, I feel sellers are going to attempt to maintain on to the people who they have,” Manzi stated. “And if something, I feel as gross sales volumes proceed to extend over the subsequent few years that we’ll see sellers hiring extra.”

Public sale purchases in 2022 represented 17 p.c of used automobiles retailed by new-car dealerships, down from 24.6 p.c in 2021. Road purchases represented 13.5 p.c of used automobiles retailed by new-car dealerships final yr, up from 8 p.c in 2021. Fewer late-model used automobiles obtainable at auctions and better public sale costs drove the shift in used-vehicle sourcing, Manzi stated.

New-car dealerships’ service and elements gross sales in 2022 totaled $137.5 billion in contrast with $125.6 billion in 2021. The issue prospects confronted find a brand new or used automobile to exchange their present automobile, together with increased buy costs led to this uptick in service and elements gross sales, Manzi stated.

“Because the new- and used-vehicle provide improves, I feel a key factor for franchised sellers is how will we preserve this quantity of service division work even when prospects might not be as prepared to repair stuff, they could simply transition to a special automobile,” he stated. “That is going to be a problem for them going ahead.”