Pub. 58 2017-2018 Issue 2

40 2435 Broad St. Lake Charles, LA 70601 337.433.8664 www.LCAutoAuction.com Family Owned and Operated Since 1991 Mike Pedersen Matt Pedersen DISCOUNTED ROOMS AVAILABLE 500 UNITS WEEKLY UD0162706 MIKE PEDERSEN LA622 AU00000003 MATT PEDERSEN LA1455  DEALERSHIP OF TOMORROW — CONTINUED FROM PAGE 37 Change inDealershipCount by 2025 Source: UBS Dealer Survey To sum up, we are not very sure where these stores will be, and we are not very agreed on how many of them there will be, but if we take an approximate average of the opinions we have heard, we will forecast dealer count in 2025 at somewhat lower than today’s 18,000, perhaps dropping to as low as 16,500 or so. 46 It would seem that the era of the collapsing dealer counts (from a peak of possibly 50,000 shortly after the end of World War II, to where we are today) is over. And indeed, we’ve been pretty stable since the end of the Great Recession. The main potential accelerant to this gentle downward drift could be if local market areas erode, under assault from internet-enabled stores working across multiple markets. Another View: The Strange Case of Mattress Stores. It might be helpful to look at some other types of retailers, to see how numerous their stores are, to get a sense of whether we are over- or under- dealered. Let’s take mattress stores. There are an estimated 4,000 of these in America, so there are roughly four times as many new-car dealerships. And that is about twice as many as about a decade ago, even with the rise in online-ordered home-delivered mattresses. A mattress is like a car in that it is fairly costly, infrequently purchased, generally needs a test drive (test nap?), is awkward to ship, and is sometimes financed. These 4,000 stores sell about 10 million mattresses a year, and are doing no parts and service work (and – we hope – no used mattress sales!). So given that franchised dealers sell three times as many units (17 million new and 16 used (retail)), and do also service work, as an incredibly rough analogy, four times as many new car dealers as mattress stores certainly does not look out of line. Don’t take this commentary as scientific: we’ve inserted it only to provide some context for the number of dealerships that are out there in the USA. 47 46 Please note that dealer count is not the same as NADA member dealer count. 47 For more on mattress stores, see http://bit.ly/2ciWAYn for “Why Are There So Many Mattress Stores in America?” by Utpal Dholakia, in Psychology Today, September 22, 2015.