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Dealer Optimism Reaches Highest Level In 5 Years

21 June 1999

National Automobile Dealers Index Rates Optimism

    WASHINGTON -- The nation's franchised automobile dealers are optimistic 
about their dealerships' performance over the next year, according to research 
by the National Automobile Dealers Association. Ratings in NADA's latest 
Dealer Optimism Index, a quarterly measure of dealers' profit expectations for 
the next 12 months, jumped 8 points, placing it at its highest level since 1994.

    Dealers' high expectations can be attributed to a 47 percent increase in
the average dealership's profit for the first quarter of 1999. Regarding
future profitability, 59 percent of the nation's automobile dealers surveyed
expect their profits to improve, and 15 percent of those expect their profits
to "substantially improve." Thirty-eight percent believe their profits will
remain unchanged, while only 6 percent feel their profits will deteriorate.

    The outlook for new-vehicle sales showed a similar trend. Nearly half of
the dealers surveyed expect new-vehicle sales to increase in the next 12
months, while only 7 percent see a decline. Forty-four percent expect new-
vehicle sales to remain near their present level.

    The National Automobile Dealers Association represents more than 19,500
franchised new-car and -truck dealers holding nearly 40,000 separate
franchises, domestic and import.