Auto dealer profits from new-vehicle sales have declined 25 percent in the 2007-08 period, according to Santa Monica-based Edmunds.com, the automotive information site.
Edmunds' economic report said that among the more than 20,000 dealerships nationwide, 30 percent are now selling fewer than 55 vehicles a month.
Seventy percent of U.S. dealers have seen a drop in profit margin, and of those, 28 percent saw a decline of more than 50 percent over the past year, according to Edmunds.
The economic downturn and tight credit have slammed the nation's auto industry, and automakers - particularly General Motors, Ford and Chrysler - have responded by cutting back on workers, factories and operations in general.
They're also consolidating operations in major metropolitan areas, including Sacramento, with a goal of fewer dealerships selling more cars.
Edmunds said the consolidation process was dragging earlier this year, but economic woes are now killing off dealerships at an alarming rate.
"The Big Three U.S. automakers have been trying to get rid of their weakest dealers for years, but the weeding-out process has gone far, far more slowly than automaker executives have wanted," said Dale Buss with Edmunds' AutoObserver.com.
"Now, this year's double-whammy of economic shocks - explosive gasoline prices that stunned consumers, followed by the current financial crisis that is constricting credit at every level - has already begun culling out U.S. car dealerships at a rate far faster than General Motors, Ford and Chrysler brain trusts could even dream was possible by their methods."
"Not everyone suffers when the chips are down," said Jeremy Anwyl, Edmunds' chief executive. "Good dealers will thrive as shoppers become ever more careful about where they spend their money."
Call The Bee's Mark Glover, (916) 321-1184.
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