The impact of metro area franchised new
vehicle dealerships on the New York economy.*
Based on 2006 data.
Economic
Impact
Report
Introduction
BACKGROUND
This report provides an in-depth analysis of the economic impact of Greater New York metro area new car and truck dealers on the area’s economy. It includes estimates of direct and indirect employment, person-al income, and tax collections generated by area automobile deperson-alers. Also included is a review of deperson-aler- dealer-ship financial statistics and operations. Dealerdealer-ship financial data (and other information cited in the report) was collected from a detailed survey sent to all new franchise automobile retailers in the Greater New York metro area.
This report was prepared by Auto Outlook, Inc., an independent automotive market analysis firm, and was sponsored by the Greater New York Automobile Dealers Association.
A MESSAGE FROM GNYADA
In 2006, franchised new car dealers in the New York metro area (New York City, Long Island, Westchester, and Rockland Counties) sold more than 445,000 vehi-cles — injecting $20.9 billion into the economy. Formed in 1910, the Greater New York Automobile Dealers Association now represents 440 new car dealerships. As an advocate for local dealers, the Association ensures that the industry’s contributions are recognized. It also works to protect consumer rights, and to create opportunities for anyone enter-ing the automotive business.
Dealers provide tens of thousands of jobs to area resi-dents— and are eager to hire even more. The retail automotive industry’s continued growth has led to a wealth of openings for dealership personnel, from entry-level office and service help, to highly trained service and management positions. This Economic Impact Report tracks the vital contributions that deal-erships and their employees make to the economic growth and development of the metro area. Sincerely,
Sheila Meyer Mark Schienberg Chairman President
Industry Conclusions
❏ Total sales for franchised new vehicle dealers . . .
$20.9 billion
❏ Jobs generated from both direct and indirect sources* totaled . . .60,465
❏ Total employee earnings, direct and indirect* . . .$2.37 billion
❏ State, payroll, and real estate tax revenues . . .$1.5 billion
❏ Dealerships’ contributions to charitable causes . . .$15.1 million
❏ Annual new vehicle retail sales in 2006 . . .445,000 vehicles
❏ Total advertising expenses . . .$408 million
❏ Total capital improvements to dealership facilities during 2006 . . .$282 million
* Figures cited in this report refer to direct and indirect economic benefits. Direct economic benefits include employment and compensation that occur at automobile dealerships. Indirect benefits include employment and compensation that occur elsewhere in the economy, but are attributable to
dealership operations. For example, dealership employees spend a portion of their salaries on goods and services in the area, which results in additional “indirect” benefits that occur in other economic sectors. Indirect benefits were estimated utilizing the RIMS II (Regional Industrial Multiplier System, version II, developed by the U.S. Department of Commerce, Bureau of Economic Analysis).
Facts on Greater New York Metro Area Automotive Retailing
Total sales . . . .
over $47,500,000
New and used vehicle sales* . . . .over 1,600 units
Dealership payroll . . . .$3.7 million
New vehicle lease sales . . . .34.1%
Vehicles serviced . . . .over 18,300
Average dealership employs . . . .75 people
Advertising expenses (including contributions to manufacturer ad campaigns) . . . .over $943,000
EXPLANATION OF INDIRECT ECONOMIC BENEFITS
* Based on information provided in the dealer survey.
EXECUTIVE SUMMARY
Employment in Metro Area
A
v
er
age number of emplo
y e es Department Service New Vehicle Parts & Acces. Used Vehicle Billing/ Admin Other Body Shop 0 5 10 15 20 25 30 Indirect 27,465 Direct 33,000 OBSERVATIONS
❏ The average dealership in the area employed 75 people, with more than 37% in the Service Department. Percentage of Dealership Employment by Department Service_ _ _ _ _ _ _ _ _ _ _ _ _ _
37.3%
New Vehicle _ _ _ _ _ _ _ _ _ _24.0%
Parts and Acces. _ _ _ _ _ _ _ _12.0%
Used Vehicle _ _ _ _ _ _ _ _ _ _10.7%
Billing/Admin. _ _ _ _ _ _ _ _ _10.7%
Other _ _ _ _ _ _ _ _ _ _ _ _ _ _ _4.0%
Body Shop _ _ _ _ _ _ _ _ _ _ _ _1.3%
TOTAL100%
OBSERVATIONS❏ In 2006, metro area new vehicle dealerships employed a total of 33,000 individuals.
❏ An additional 27,465 indi-viduals were employed as a result of the indirect impact of dealership operations.
❏ Automobile dealership employment increased slightly from 2005 to 2006.
(This applies to both direct and indirect employment.)
DEALERSHIP EMPLOYMENT BY DEPARTMENT
EMPLOYMENT TOTALS FOR NEW VEHICLE RETAILING INDUSTRY
Dealership Contribution to Total Employment in the Area Total employment resulting from auto dealerships _ _ _ _ _ _ _ _ _ _ _
60,465
Total employment in 2005 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _60,336
Employment In Metro Area
EMPLOYEE COMPENSATION
2006 Estimates Direct Indirect TOTAL
Payroll $1,412,650,360 $642,755,914
$2,055,406,274
Fringe Benefits $220,951,280 $100,532,832
$321,484,112
TOTAL
$1,633,601,640
$743,288,746
$2,376,890,386
2006 Estimates Per Dealer
Payroll _ _ _ _ _ _ _ _ _ _ _ _ _ _
$3,210,569
Fringe Benefits _ _ _ _ _ _ _ _ _ _$502,162
TOTAL
$3,712,731
ALL DEALERS
AVERAGE PER DEALER
OBSERVATIONS
❏ Average dealership total payroll expense during 2006 exceeded $3.7 million.
❏ Total employee compensation in the metro area attributable to new vehicle franchised dealers was $2.37 billion!
From Automotive Retailing Today
America’s Dealers are Hiring Now
109,000 Positions Available for Students, Vets, and Others Looking
for Great Careers
Sales: 45,698 vacancies (Est. Salary Range for Sales Positions $31,000-$118,000) Service: 36,456 vacancies (Est. Salary Range for Service Positions $28,000-$96,000)
Collision Repair: 7,695 vacancies (Est. Salary Range for Collision Positions $31,000-$64,000) Parts: 6,491 vacancies (Est. Salary Range for Parts Positions $22,000-$63,000)
Dealership Administration: 5,159 vacancies (Est. Salary Range for Administration Positions $21,000-$163,000) Other (porters, car washers, detailers, etc): 7,315 vacancies (Est. Salary Range for Other Positions $21,000-$33,000)
❏ One-third of the nation's auto dealers reported hiring at least one veteran since January 2006.
❏ A majority of dealerships (68 percent) report offering summer/seasonal employment and participate in internship programs. Three-in-four dealerships say that this is an effective method to identify candidates for permanent positions.
Tax Collections
Dealership Capital Improvements
OBSERVATIONS❏ In 2006, dealers collected or paid a total of more than $1.5 billion in state and local tax, up from $1.2 Billion in 2005.
OBSERVATIONS
❏ During 2006, automobile dealers spent a total of $282 million on capital improvements to facilities!
❏ More than 6,100 total jobs were created due to dealership expenditures for capital improvements.
Tax Category Average Per Dealer Total Number Metro Area Total
of Dealers
State Sales Taxes Collected $2,885,632 440
$1,269,678,080
State Payroll Taxes $281,563 440
$123,887,720
Real Estate Tax $148,963 440
$65,543,720
Other $110,526 440
$48,631,440
AREA TOTAL
$3,426,684
440
$1,507,740,960
Automotive Dealers in the Greater New York Area Allocate Significant Expenditures to Improve Facilities
Total capital improvements during 2006 . . . .
$282 million
Total average dealership capital improvements during 2006 . . . .$640,000
Highest expenditure for a single dealership during 2006 . . . .$4.1 million
Jobs created due to dealership capital improvements during 2006* . . . .6,122
Capital expenditures based on information provided in the dealer survey.Metro Area New Vehicle Sales
TOTAL NEW RETAIL REGISTRATIONS
NEW RETAIL REGISTRATIONS BY CATEGORY
OBSERVATIONS
❏ Area dealers sold more than 445,000 new cars and light trucks during 2006.
❏ New retail light vehicle sales in the metro area increased more than 50% from 1993 to 2006, much higher than the 20% increase in U.S. sales during the same period.
Source: AutoCount, an Experian Company.
OBSERVATIONS
❏ Light truck share of the total area market increased from 23% in 1993 to 46% in 2006.
❏ Registrations of Japanese vehicles increased 4.5% from 2005 to 2006.
Ne
w r
etail car and ligh
t truck r
egistr
a
tions
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20060
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2005 2006 Domestic 145,988 127,448 Japanese 216,333 226,143 European 63,460 70,810 Korean 22,325 21,457 TOTAL448,106
445,858
2005 2006 Car 233,692 240,671 Light Truck 214,414 205,187 TOTAL448,106
445,858
Metro Area New Vehicle Sales
34.1% 65.9% New Vehicles Leased by Customers New Vehicles Purchased by CustomersAVERAGE DEALERSHIP SALES BY DEPARTMENT
PERCENTAGE OF NEW VEHICLES PURCHASED OR LEASED — 2006
OBSERVATIONS
❏ Greater New York metro area dealers sold an average of 1,000 new vehicles. Of that total, 65.9% were purchased and 34.1% were leased by customers.
$33,047,259 $7,508,321 $3,198,811 $2,739,030 $1,079,191 New Vehicle Used Vehicle Parts Service Other OBSERVATIONS
❏ Total average dealership sales — $47,572,000.
❏ More than 69% of average total sales were in the new vehicle department.
Dealership Advertising and Marketing
Television, $195,892,876 Newspaper, $109,636,880 Radio, $46,221,830 Internet, $42,006,643 Direct Mail, $12,209,526 Outdoor, $2,242,512TOTAL ADVERTISING EXPENSE
(including contributions to manufacturer ad programs)
INDIVIDUAL DEALERSHIP ADVERTISING EXPENSE
(excluding contributions to manufacturer ad programs) OBSERVATIONS
❏ Average dealership advertising expenses were $927,750
❏ The area’s $408 million advertising spending includes mandatory contributions to manufacturer ad programs.
❏ Internet advertising spending increased 170% from 2003 to 2006.
OBSERVATIONS
❏ Television advertising spending increased 100% from 2003 to 2006.
TOTAL = $408,210,267
Newspaper, $128,324,084 Television, $41,598,960 Radio, $27,489,934 Internet, $23,739,548 Direct Mail, $5,430,572 Other, $1,915,056TOTAL = $228,498,154
More than 1.2 million people attend the New York International Auto Show each year, and the Show represents more than $181 million in direct and indirect economic impact for the city. The figures below represent 2006 spending.
10
New York International Auto Show
Retail from local stores $12,070,000* Entertainment $7,350,000 Eating and Drinking $14,400,000 Lodging $11,720,000 $8,330,000 $7,100,000 $9,430,000 $7,010,000 $20,400,000 $14,450,000 $23,830,000 $18,740,000 Direct Impacts Indirect Impacts Total Impact Non-local press Non-local employees Non-local attendees Travel and transportation $10,670,000 $7,510,000 $18,230,000 NYIAS Producer Other goods and services $10,150,000 Professional/ technical services $12,680,000 Security $1,090,000 Personnel services $28,450,000 Rental/ Leasing $1,930,000 Advertising $1,630,000 $5,460,000 $6,690,000 $630,000 $14,900,000 $840,000 $1,150,000 $15,610,000 $19,370,000 $1,720,000 $43,340,000 $2,780,000 $2,780,000 Exhibiting companies and PR departments Total Direct $112,150,000 Total Indirect $69,080,000 Grand Total $181,220,000
The New York International Auto Show is owned and produced by the Greater New York Automobile Dealers Association.
Dealership financial data (and other information in this report) was collected from a survey sent to all new vehicle automotive retailers in the Greater New York metro area.
Economic impact is separated into two categories: direct and indirect. Direct impact comprises economic activity at automotive dealerships, including dealership employment and employee compensation. Indi-rect impact occurs away from the dealership, and includes the extended contributions dealerships and their employees make to the area’s economy.
The indirect economic impact of automotive retailers was estimated by Auto Outlook, Inc. Estimates were based on previous impact studies that relied upon regional input-output computer models. In this report, indirect economic impact estimates are intentionally conservative, and may therefore underestimate the overall contribution dealers make to the area economy.
ABOUT AUTO OUTLOOK, INC.
Auto Outlook, an automotive market analysis firm, provides market research services to automobile dealers. Its President, Jeffrey Foltz, holds a MS in Economics (University of Delaware) and has conducted numerous
research projects analyzing state and regional economies. To contact Auto Outlook, Inc. directly, please call (800) 206-0102, or visit www.autooutlook.com.
2007 Economic Impact Report
Methodology & Background
HEADQUARTERS
Greater New York Automobile Dealers Association, Inc.
18-10 Whitestone Expressway Whitestone, NY 11357
718-746-5900 www.gnyada.com
Mark Schienberg, President
Stuart Rosenthal, Vice President, Legal Affairs & Operations Pamela Yaeger, Director, Communications & Website
GOVERNMENTAL AFFAIRS OFFICE
Wilson, Elser, Moskowitz, Edelman & Dicker, LLP677 Broadway Albany, NY 12207 518-449-8893
