ECONOMICTH

E

MAY 2015Study sponsored by

New Jersey Coalition of AutomotiveRetailers - Confidential 2015 report

compiled from 2014 data

of Franchised New Vehicle Retailers on the New Jersey Economy IMPACT

During 2014, franchised new vehicle dealerships in the State generated a total of nearly 55,000 jobs. Job creation by the industry increased from 2013 to 2014.

New Jersey residents earned more than $3 billion as a result of automotive dealership operations in 2014, an increase of 6% versus 2013.

Average dealership payroll was $4.625 million, up from $4.310 million in 2013.

Dealerships collected or paid a total of more than $1.57 billion in State and local taxes in 2014, up 5.5% from 2013.

Automobile dealerships spent more than $395 million on advertising during 2014.

Franchised new vehicle dealerships in the state had total sales of $32.13 billion in 2014, a 5.6% increase compared to 2013.

Average dealership sales were $63 million in 2014, up from $59.1 million in 2013.

Collectively, automobile dealers contributed over $13.2 million to charitable organizations in 2014.

DEALERSHIP FINANCIAL SUMMARY - 2014

Average dealership sales: $63,000,000

Average dealership contributions to charitable causes: $26,000

Average dealership advertising expenses: $775,000

Average number of vehicles serviced per dealership: 21,400

DEALERSHIP VEHICLE SALES SUMMARY - 2014

Average dealership retail new vehicle sales: 990 units

Average dealership retail used vehicle sales: 680 units

Shown above is a summary of average dealership financial statistics and vehicle sales results during 2014.

This report provides a summary of the significant impact that new franchised automobile dealers have on the New Jersey economy. As clearly illustrated, the automotive retailing industry is critically important to the health of the State’s economy.

The report includes estimates of direct and indirect employment, personal income, and tax collections during 2014. Indirect impact accounts for the residual contribution resulting from dealership operations (frequently referred to as the “multiplier effect”). This report was prepared by Auto Outlook, Inc., an independent automotive market analysis firm, and is sponsored by the New Jersey Coalition of Automotive Retailers.

Contact information is on the back page.

A MESSAGE FROM THE NJ CAR PRESIDENT

New Jersey auto sales, and the overall economic outlook of the industry both continue to contribute positively to the Garden State’s economy. Auto sales in New Jersey were up 5.6% in 2014, hitting $32.13 BILLION. The industry also contributed an astounding $1.57 Billion in State and local taxes to the New Jersey economy. The network of 510 franchised neighborhood new car and truck retailers are selling cars and trucks at an aggressive pace and continue to add good-paying jobs in the New Jersey auto retail sector.

Economists expect the positive news to continue in 2015 as low interest rates, better access to credit, mild inflation, and increasing consumer confidence all combine to keep the auto retail market moving forward. In particular, if employers continue adding jobs at a brisk pace in 2015, sales should continue to increase and may approach pre-recession highs.

Pent up demand for new cars, a dramatically aging vehicle fleet on the roads and a huge influx of vehicles expected to come off-lease in the next two years are additional factors that should drive automotive sales.

More and more consumers are also embracing the many technological and fuel-efficiency advantages introduced in many vehicles made today. The advancements made in the last five, ten or 15 years is staggering and make a new vehicle purchase a wise investment.

This report offers hard data on employment, payroll, tax collections and industry sales in New Jersey in 2014.

James B. AppletonPresident

New Jersey Coalition of Automotive Retailers

EMPLOYMENT

Automobile dealerships in New Jersey employed a total of

35,700 individuals in 2014, with an additional 19,278 positions

resulting from indirect economic impact. This total represented

12.1% of total retail employment in the state. Dealership employment

(direct only) increased 2.8% from 2013 to 2014. Average dealership

employment was 70 individuals.

EMPLOYMENT TOTAL FOR NEW VEHICLE RETAILING INDUSTRY • 2014

Contribution to Statewide Retail Employment by Franchised New Vehicle Dealerships • 2012 - 2014

2012 2013 2014 % change ‘13 to ‘14

Total Employment Resulting from Auto Dealership 54,281 53,483 54,978 2.8%

Total Retail Employment in the State 443,000 448,000 455,000 1.6%

DEALERSHIP % OF RETAIL STATEWIDE TOTAL 12.3% 11.9% 12.1%

AVERAGE NUMBER OF DEALERSHIP EMPLOYEES BY DEPARTMENT • 2014

Indirect 19,278

Direct35,700

(DIRECT: AT DEALERSHIPS; INDIRECT: ELSEWHERE IN ECONOMY)

SERVICE VEHICLESALES

ADMIN& OTHER

PARTS &ACCESSORIES

BODYSHOP

# O

F E

MP

LOY

EE

S

0

5

10

15

20

25

30

PAYROLL

EMPLOYEE COMPENSATION • 2012-2014

2012 2013 2014 % change ‘13 to ‘14

Total Payroll (including fringe benefits) For Average Franchised New Vehicle Dealership in New Jersey

$4,075,000 $4,310,000 $4,625,000 7.3%

TIMES

Total Number of Franchised New Vehicle Dealerships in New Jersey

515 515 510 -1.0%

EQUALS

Total Employee Compensation at Franchised New Vehicle Dealerships

$2,098,625,000 $2,219,650,000 $2,358,750,000 6.3%

PLUS

Additional Indirect Employee Compensation Resulting from Franchised New Vehicle Dealership Operations

$650,573,750 $696,970,100 $733,571,250 5.3%

EQUALS

TOTAL EMPLOYEE COMPENSATION TO NEW JERSEY RESIDENTS DUE TO NEW VEHICLE

RETAILING INDUSTRY$2,749,198,750 $2,916,620,100 $3,092,321,250 6.0%

The average automobile dealership in New Jersey had payroll of $4,625,000 in 2014, up 7.3% from 2013. Payroll for the new vehicle

retailing industry was more than $2.35 billion, with the total (including indirect impact) exceeding $3 billion.

TAX REVENUE

Real Estate and Other Local $85,680,000

State Sales $1,356,600,000

State and Local Payroll $130,050,000

State and Local Taxes Collected and/or Paid by Franchised New Vehicle Dealerships • 2012-2014

2012 2013 2014 % change ‘13 to ‘14

State Sales TaxState and Local Payroll TaxesReal Estate and Other Local TaxesTOTAL DEALERSHIP STATE AND LOCAL TAX REVENUE

$1,236,000,000$115,875,000$77,250,000

$1,429,125,000

$1,287,500,000$121,025,000$82,400,000

$1,490,925,000

$1,356,600,000$130,050,000$85,680,000

$1,572,330,000

5.4%7.5%4.0%5.5%

Federal Tax Summary for All Franchised New Vehicle Dealerships • 2012-2014

2012 2013 2014 % change ‘13 to ‘14

Federal Payroll TaxesFederal Business Income TaxesTOTAL

$566,500,000$46,350,000$612,850,000

$602,550,000$47,380,000$649,930,000

$652,800,000$50,490,000$703,290,000

8.3%6.6%8.2%

STATE AND LOCAL TAXES COLLECTED AND/OR PAID BY FRANCHISED NEW VEHICLE DEALERSHIPS• 2014

Automobile dealerships collected or paid a total of more than $1.57 billion in State and local taxes during 2014, up 5.5% from 2013. State sales tax revenue

exceeded $1.35 billion. Federal tax revenue generated by dealerships was more than $703 million.

ADVERTISING

New franchised automobile dealerships spent a total of over $395 million on advertising during 2014, up from 2013. Internet advertising accounted for the

largest percentage of dealership advertising (39%).

Print16% TV

18% Mail12%

PERCENTAGE OF FRANCHISED NEW VEHICLE DEALERSHIP ADVERTISING EXPENSE BY MEDIA • 2014

Internet39%

Other10%

Radio5%

New retail registrations of cars and light trucks in New Jersey exceeded 500,000 units from 2000 thru 2005. Registrations declined to a 20 year low in 2009. The market recovery began in 2010, with registrations increasing to about 400,000, a 12% improvement from 2009. Last year’s total was 498,966, up 39% from 2009.

Data Source: IHS Automotive

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

100,000

200,000

300,000

400,000

500,000

600,000

NEW VEHICLE MARKET REVIEW

NEW RETAIL LIGHT VEHICLE REGISTRATIONS IN NEW JERSEY 2003-2014

NEWVEHICLE

USEDVEHICLE

SALES ($ MILL)

P & A

SERVICEDEPT.

OTHER

2012

2013

2014

0 5 10 15 20 25 30 35 40

DEALERSHIP SALES

Franchised New Vehicle Dealership Sales Summary • 2012-2014

2012 2013 2014 % change ‘13 to ‘14

Average franchised new vehicle dealership salesTOTAL AUTOMOTIVE RETAILING SALES IN NJ

$56,500,000$29,097,500,000

$59,100,000$30,436,500,000

$63,000,000$32,130,000,000

6.6%5.6%

AVERAGE FRANCHISED NEW VEHICLE DEALERSHIPSALES BY DEPARTMENT [$]

New franchised automobile dealerships in New Jersey had total sales exceeding $32 billion during 2014. Average dealership sales were $63 million, with the new

vehicle department accounting for 60% of the total. Average dealership sales increased by 6.6% from 2013 to 2014.

NJ CAR MEMBER LIST

District 1Action Auto Group-MillvilleAvalon HondaBurke Motors, Inc.Gentilini ChevroletGentilini Ford, Inc.Kindle Ford Lincoln IsuzuLilliston Chrysler Dodge JeepLilliston Ford, Inc.Perry-Egan Chevrolet, Inc.RK Chevrolet Subaru, Inc.Rossi HondaTeam NissanToyota Scion of VinelandVann Dodge Chrysler Jeep

District 2Atlantic Chrysler Jeep VW Bennett Chevrolet, Inc.BMW of Atlantic CityBoardwalk AcuraBoardwalk HondaChapman Ford Lincoln MazdaKerbeck Cadillac Chevrolet Buick GMCKerbeck Mitsubishi SubaruLexus of Atlantic CityMatt Blatt Kia-Egg Harbor Twp.Mercedes-Benz Porsche of Atlantic CityNissan Volvo Infiniti of Atlantic CityShore ToyotaSport Hyundai Dodge

District 3Bay Shore Ford of Pennsville, Inc.Bob Novick Chevrolet, Inc.Freightliner of BridgeportLiberty Kenworth of South JerseyPellegrino Chrysler JeepPointe Buick GMCSpirit Chrysler Dodge JeepVolkswagen of Salem County

District 4Acura TurnersvilleAudi TurnersvilleHolman Ford Lincoln-TurnersvilleNissan of TurnersvillePellegrino Buick GMCPrestige Volkswagen Mitsubishi SubaruToyota of TurnersvilleTurnersville Auto MallTurnersville Chrysler JeepTurnersville Kia

District 5Ace FordBarlow Buick GMC-WoodburyMount Ephraim Chrysler Dodge RAMPellegrino ChevroletPerformance Dodge RamToyota Scion of RunnemedeWoodbury Nissan, Inc.

District 6Bergey’s Truck Center-PennsaukenCherry Hill Classic CarsCherry Hill Dodge Chrysler JeepCherry Hill ImportsCherry Hill Kia

Cherry Hill MitsubishiCherry Hill NissanCherry Hill VolvoEchelon Ford, Inc.Fiat of Maple ShadeHolman Automotive Group Holman Ford Lincoln-Maple ShadeHolman InfinitiLand Rover Cherry HillMall Chevrolet, Inc.Maple Shade MazdaMercedes-Benz of Cherry HillSubaru of Cherry HillWinner Ford

District 7Barlow ChevroletBurlington Chevrolet, Inc.Burlington KiaBurlington VolkswagenDavis HondaDodge Chrysler CityF. C. Kerbeck & SonsHolman CadillacHolman Toyota ScionLexus of Cherry HillLiberty Toyota Scion Lucas FordMini of Mount Laurel

District 8Arena Buick GMCBurns Buick GMCBurns HondaBurns-Kull Automotive GroupClassic Cars NissanElkins ChevroletHainesport Auto & Truck CenterLucas ChevroletLucas Chrysler Jeep DodgeMedford FordMiller Ford Lincoln Subaru

District 9Barlow Buick GMC-ManahawkinCauseway Ford Lincoln Causeway HondaCauseway NissanManahawkin Chrysler DodgeManahawkin Kia

District 10Circle Dodge, Inc.Downs FordGateway Toyota ScionHonda of Toms RiverLester Glenn Auto GroupLester Glenn Buick GMCLester Glenn ChevroletLester Glenn Chrysler Jeep Dodge RamLester Glenn Hyundai-Toms RiverLester Glenn MazdaLester Glenn SubaruPine Belt AutomotiveToms River KiaToms River VolkswagenWeisleder Ford Mazda

District 11Action Chevrolet of FreeholdAcura of OceanAudi FreeholdBuhler Ford

Buhler MitsubishiCircle BMWCircle Chevrolet CompanyCircle InfinitiDCH BMW of FreeholdDCH Freehold NissanDCH Freehold ToyotaDCH Kay HondaFreehold Buick GMCFreehold Chrysler JeepFreehold Dodge, Inc.Freehold FordFreehold HyundaiFreehold KiaFreehold SubaruGalaxy ToyotaGeorge Wall Ford Lincoln Gold Coast Cadillac Honda of FreeholdIrwin Lincoln MazdaLand Rover MonmouthLester Glenn Ford Lester Glenn Hyundai-Manahawkin Maurice Schwartz & Sons, Inc.Mercedes-Benz of FreeholdMini of Monmouth Nissan World of Red BankRay Catena Lexus of FreeholdRay Catena Lexus of MonmouthRay Catena MaseratiRed Bank Volvo, Inc.Sansone Jr’s 66 Auto Mall Schneider & Nelson AudiSchneider & Nelson Motor CarsSea Coast ChevroletSea View Auto Corp.Shrewsbury Motors Volkswagen of FreeholdWorld Jeep Chrysler Dodge RamWorld SubaruWorld Volkswagen

District 12All American Ford Subaru of Old BridgeDCH Academy HondaHunter Jersey Peterbilt-ClarksburgOasis Chevrolet

District 13All American Chevrolet, Inc.Buhler Chrysler Jeep DodgeContemporary Motor Cars, Inc.Pine Belt of KeyportStraub Motors, Inc.Tom’s Ford Werner’s Automotive, Inc.

District 14Haldeman Ford of HightstownHamilton HondaHamilton Mazda Volkswagen, Inc.Perrine Buick GMCPrinceton BMW MiniRoute 33 NissanWindsor Nissan

District 15Coleman Auto Group, Inc.Coleman Buick GMC CadillacDavis HyundaiHaldeman FordHaldeman Lexus of Princeton

Lawrenceville Ford LincolnMercedes-Benz of PrincetonPorsche of PrincetonPrecision AcuraPrinceton Chevrolet, Inc.Route 1 Chrysler Dodge Jeep RamTeam Toyota of PrincetonVolvo of Princeton

District 16Acme NissanAction Auto Group-FlemingtonBaker Chrysler Jeep Dodge, Inc.Brad Benson HyundaiBridgewater NissanBridgewater VolvoDayton ToyotaDitschman Flemington Ford LincolnFiat of SomervilleFlemington BMWFlemington Buick Chevrolet GMC CadillacFlemington Dodge Chrysler JeepFlemington InfinitiFlemington NissanFlemington Porsche Audi VWFlemington SubaruFred Beans Kia of FlemingtonFred Beans Toyota of FlemingtonFullerton Chrysler Jeep DodgeFullerton FordGabrielli Kenworth of NJHonda of PrincetonLand Rover PrincetonMercedes-Benz of FlemingtonPrinceton Audi Princeton MiniPrinceton Volkswagen

District 17DCH Brunswick ToyotaGateway Kia of North BrunswickMalouf Buick-GMC, Inc.Malouf Chevrolet-Cadillac, Inc.Malouf Ford-Lincoln, Inc.Victory Subaru LLC

District 18Bell AudiBentley EdisonCambria MackCampbell FreightlinersEdison NissanFerrari Maserati of Central NJLexus of EdisonOpen Road Acura of East BrunswickOpen Road BMW of EdisonOpen Road HondaOpen Road MazdaRay Catena InfinitiRay Catena Jaguar of EdisonRay Catena Motor CarReydel Volkswagen, Inc.Route 18 Chrysler Jeep Dodge RamVolvo of Edison

District 19Bell FordDah Chong Hong USAMcGuire CadillacMiller Buick GMC Corp.Richard Lucas Chevrolet

Route 1 Mazda-WoodbridgeRoute 1 ToyotaSansone Chrysler Jeep DodgeSansone Hyundai, Inc.Sansone KiaSansone Nissan

District 20Cambria Mack Trucks, Inc.Linden Volkswagen Maplecrest of UnionMaxon Hyundai MazdaMulti ChevroletMulti SubaruPlanet HondaRay Catena of UnionRoute 22 HondaRoute 22 KiaRoute 22 NissanRoute 22 ToyotaUnion Buick GMCUnion Volkswagen

District 21Autoland Chrysler Jeep Dodge, Inc.Crown Cadillac, Inc.DMT Automotive Enterprises, Inc.Douglas InfinitiDouglas VolkswagenHFI Truck CenterJMK BMWJMK FiatLiccardi Ford, Inc.Nissan World of SpringfieldSalerno-Duane, Inc.Smythe Volvo, Inc.Springfield AcuraSpringfield Truck Center, Inc.Team Welsh Jeep Chrysler

District 22Bell MitsubishiCrystal MotorsGlobal Auto MallGreen Brook Buick GMCLiccardi Chrysler DodgeNorth Plainfield NissanVIP Honda

District 23Audi BridgewaterAutosport HondaBill Vince’s Bridgewater AcuraBMW of BridgewaterBridgewater ChevroletCallaremi Cadillac Buick GMCClinton AcuraClinton HondaHackettstown HyundaiHonda of HackettstownJohnson Dodge ChryslerKemper KiaLexus of BridgewaterMotion KiaMuller Toyota, Inc.Opdyke’s Sales & ServiceOpen Road Auto GroupOpen Road of BridgewaterOpen Road Volkswagen of BridgewaterPhillipsburg Easton Honda, Inc.Phillipsburg Easton HyundaiRay Catena Infiniti of BridgewaterRossi Chevrolet Buick GMCSmith Motor Company, Inc.Subaru 46

District 24Audi Newton

Franklin Sussex Auto Mall, Inc.Franklin Sussex HyundaiHoover Truck CenterIntercar Mercedes-BenzLynnes Nissan WestMagarino FordMcGuire Chevrolet CadillacNewton KiaOpen Road of NewtonRoute 46 ChevroletRoyal Buick GMC, Inc.Subaru World of NewtonSussex HondaToyota World of NewtonVolkswagen of Newton

District 25Acura of DenvilleAudi of MendhamAyers ChevroletBeyer Chrysler Jeep Dodge RamBeyer FordDalessio Chevrolet BuickDover Dodge Chrysler Jeep, Inc.Family Ford, Inc.Fiat of Morris CountyGateway Kia of DenvilleGearhart ChevroletH & H MackJim Salerno Buick GMCJohn Johnson DodgeJoyce HondaMaplecrest Ford Inc.Mercedes-Benz of MorristownNissan World of DenvilleOpen Road BMW of MorristownOpen Road BMW of RoxburyOpen Road Mazda of Morristown Open Road Mini of MorristownPaul Miller Volkswagen of BernardsvillePerformance Ford LincolnSalerno Duane InfinitiSubaru of MorristownTowne HyundaiTowne ToyotaToyota of Morristown, Inc.Trend Motors

District 26Bentley ParsippanyCaldwell ToyotaDCH Montclair AcuraDeCozen Chrysler Jeep DodgeKonner Chevrolet, Inc.Land Rover ParsippanyMercedes-Benz of CaldwellPaul Miller AudiPaul Miller Auto GroupPaul Miller Honda of West CaldwellPaul Miller PorschePaul Miller SubaruPrecision Chrysler Jeep Dodge RamRoute 23 Auto MallVerner-Cadby, Inc.

District 27DCH Millburn Audi Ed Carney Ford, Inc.Hilltop Nissan, Inc.Lexus of Route 10Madison HondaMadison JaguarMaserati of Morris CountyNielsen Chrysler Jeep Dodge Ram

Norman Gale Buick GMCOpen Road CadillacPrestige VolvoWigder Chevrolet, Inc.

District 28DCH BMW of BloomfieldLynnes HyundaiLynnes NissanLynnes SubaruNutley Kia

District 30Coast HondaColonial AirstreamGarden State VolvoHonda UniverseJim Curley Buick GMCJim Curley KiaLarson Ford, Inc.Pine Belt Chevrolet of LakewoodPine Belt Chrysler JeepPine Belt SubaruSea Breeze FordT & T Coast Buick GMCToyota Scion World of Lakewood

District 31Chevrolet of Jersey CityHudson Chrysler Jeep DodgeHudson HyundaiHudson KiaHudson NissanHudson SubaruHudson ToyotaJersey City FordMetro Honda

District 32Audi MeadowlandsBeyer Bros. Corp.Hudson County MotorsHudson HondaMcGuire Buick GMCMeadowland Ford Truck Sales

District 34Fette Ford, Inc.Fette InfinitiGarden State Honda-CliftonGensinger Motors, Inc.Schumacher Chevrolet of Clifton

District 3546 MitsubishiBrogan Cadillac CompanyNissan 46

District 36Bellavia Chevrolet BuickEast Coast Toyota ScionFrank’s Truck Center, Inc.MTC KenworthQuality Auto MallScheeler Trucks Sales & ServiceTeterboro Chrysler JeepThree County Volkswagen Corp.

District 37All American Ford, Inc.Autoeastern Nissan of Englewood CliffsBenzel-Busch Motor Car Corp.BMW of TenaflyD & C Honda of TenaflyEast Coast Automotive, Inc.Englewood Auto GroupEnglewood Cliffs CadillacEnglewood Volvo

Ford of Englewood, Inc.Infiniti of EnglewoodLexus of EnglewoodParkway ToyotaPrestige KiaTown MotorsToyota of Hackensack

District 38All American Ford of ParamusAutoeastern Nissan of MeadowlandsAutoeastern Nissan of ParamusChrysler Jeep Dodge of ParamusDCH Paramus HondaElite Nissan of BergenfieldGlen ToyotaHawthorne ChevroletJack Daniels AudiJack Daniels KiaKundert VolvoLand Rover ParamusMazda of LodiNissan of HawthorneNorth Jersey Truck CenterParamus Auto MallParamus HyundaiParamus MitsubishiPark Avenue AcuraPark Avenue BMWPaul’s Motors Sales & ServicePrestige Motors Corp.Route 4 Auto Group

District 39Acura of RamseyBuick GMC of MahwahCadillac of MahwahJack Daniels Audi-Upper SaddleJoe Heidt MotorsLiberty HyundaiLiberty Subaru Inc.Mahwah Ford Sales & Service, Inc.Mahwah HondaMaserati of Bergen CountyPrestige BMWPrestige LexusPrestige MiniPrestige ToyotaRamsey Chrysler Jeep DodgeRamsey FiatRamsey InfinitiRamsey MazdaRamsey NissanRamsey SubaruRamsey Volvo

District 40Bob Ciasulli Auto GroupCrestmont Toyota VolkswagenLincoln of WayneMcGuire Buick GMCOpen Road Acura of WaynePaul Miller BMWRoute 23 HondaRoute 23 KiaRoute 46 Chrysler Jeep DodgeSchumacher Chevrolet, Inc.Tri-County LexusWayne FordWayne Mazda HyundaiWayne Subaru, Inc.

Dealership financial data (and other information cited in this report) was collected from information reported by New Jersey franchised automotive retailers in 2014. The information was sufficiently detailed to allow the formation of a statistically reliable data base for financial and operational indicators.

The economic impact of the industry is separated into two main categories: direct and indirect. Direct impact comprises economic activity at automotive dealerships themselves. Indirect impact occurs away from the dealership proper, and takes into account the extended contribution dealerships make to the State’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 economic computer models. Indirect estimates in this report are intentionally conservative, and therefore, may underestimate the overall contribution automotive retailers make to the New Jersey economy.

Auto Outlook, Inc. is a regional automotive market analysis firm providing market research services to automotive dealerships.

STUDY SPONSORED BY:

New Jersey Coalition of Automotive Retailers856 River RoadP.O. Box 7510Trenton, NJ 08628(609) 883-5056

STUDY PRODUCED BY:

Auto Outlook, Inc.P.O. Box 390Exton, PA 19341(610) 640-1233

METHODOLOGY