dealerships

Car Sales Tanked in 2020, But Dealerships Had Their Most Profitable Year Ever

Photo credit: Howard Berman - Getty Images

Photo credit: Howard Berman – Getty Images

From Road & Track

Last year wasn’t good for new car sales. Factory shutdowns, lockdowns, and consumer hesitancy caused car sales to crater in the Spring of 2020; stronger sales in the latter months of the year couldn’t erase the early drop. Overall, sales were down 14.6 percent in 2020, which sounds like bad news for dealers. That’s hardly the case: Automotive News reports that overall dealer profits soared by 48 percent last year, leading to record-setting profits despite sluggish sales.

That begs the question: How did dealers manage to make so much more money selling fewer cars? The first answer appears to be simple: They put the squeeze on us. Shuttered factories drastically reduced supply, but demand stayed strong. That led to a rush on dealers for in-demand models, with a line of customers ready to pay. Dealers could charge what

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Carvana And Vroom Are Still Tiny Compared To Dealerships

I had hoped that the billion-dollar startups of online car sales like Carvana and Vroom would utterly quash megamall car dealerships forever. In fact, the big brick-and-mortar dealers seem to be surviving just fine.

This popped up on my radar from a somewhat troubling Automotive News headline declaring that startups were displacing small car dealerships, taking out the little guys while the most bloated big lots weathered the storm. “Smallest dealers pressed as online startups reshape used market,” Automotive News declares, citing a JP Morgan analyst:

“A lot of smaller independent used retailers, or independent franchise dealers, they are the ones that are likely to suffer the most because they don’t have the capital or the relationships or the bandwidth to invest in the move towards digital,” said Rajat Gupta, auto retail analyst with J.P. Morgan.

Certainly, this sounds like a potential problem for independent dealers in the

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Car dealerships, including those owned by lawmakers, got billions in PPP money

WASHINGTON — At least a dozen lawmakers have ties to organizations that received federal coronavirus aid, according to newly released government data, highlighting how Washington insiders were both author and beneficiary of one of the biggest government programs in U.S. history.

Under pressure from Congress and outside groups, the Trump administration this week disclosed the names of some loan recipients in the $659 billion Paycheck Protection Program, launched in April to help smaller businesses keep Americans employed during the pandemic. Connections to lawmakers, and the organizations that work to influence them, were quickly apparent.

Among businesses that received money was a California hotel partially owned by the husband of House Speaker Nancy Pelosi, as well as a shipping business started by Transportation Secretary Elaine Chao’s family. Chao is married to Senate Majority Leader Mitch McConnell.

Car dealerships owned by Republican Reps. Roger Williams of Texas and Mike Kelly of Pennsylvania

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