Car dealership sales productivity ‘stuck in a rut’
Todd Szott says his dealership group won’t sacrifice personal sales for productivity. Pictured customer Olivia Apfel takes delivery of her new Ford Mach-E with her Mom, Michelle Apfel, from salesperson Vernon Davis at Szott Ford in Holly, Mich. (COURTESY OF TODD SZOTT)
Before the COVID-19 pandemic, Baxter Auto Group, of Omaha, Neb., averaged 11 to 12 new- and used-vehicle sales a month for each salesperson. But changes to the retail operation, including salespeople handling finance paperwork, and trimming staff by a quarter have accelerated that productivity to an average of 16 to 18 per month, dealer Mickey Anderson said.
Anderson, president of Baxter Auto, with stores in Colorado, Kansas, Nebraska and Wisconsin, said more of the vehicle sales transaction is happening digitally, via email, texts, artificial intelligence-enhanced chats and electronic signings.
“We’re able to achieve so much more outside the dealership, and that happens so much more quickly than the in-store experience,” Anderson said. “That time is much more appreciated by the guest but makes our employees far more efficient. Through the elimination of handoffs and having salespeople handle really almost the entire transaction, that has also made for a more efficient transaction.”
Baxter Auto ranks No. 58 on Automotive News’ list of the top 150 dealership groups based in the U.S., retailing 17,513 new vehicles in 2023.
Dealership groups nationally are adjusting age-old sales methods to make car sales quicker for customers and employees as they work to boost salesperson productivity. Using digital tools and introducing AI assists to put customers more in control of the buying process are among changes they’re implementing.
The new processes are resulting in a productivity uptick at some dealerships, such as Baxter Auto Group stores. And these new processes are needed, industry experts say. Research indicates that average monthly sales per salesperson hasn’t budged much for decades.
Salesperson productivity at franchised dealerships has averaged 10 to 12 cars per month since 1980, estimates Glenn Mercer,president of Cleveland consulting firm GM Automotive. Mercer has studied salesperson productivity since 2000 and has used his data for National Automobile Dealers Association projects.
“A salesperson today might say, ‘Really, after everything that’s happened, all that’s gone on, apps on phones, FaceTime, that’s it?,’” Mercer said regarding the statistic. Dealers hope the next decade of digital tools “will help dramatically increase productivity” and lower expenses, he said.
Fifty-seven percent of the more than 100 auto retailers queried in Automotive News’ January Dealer Outlook Survey said the average number of cars sold per salesperson is 10 to 14 a month. (Forty-eight percent selected the range a year ago in the Automotive News survey.) Sixteen percent in the 2025 survey said their dealerships’ average is 15 to 19, while 22 percent said it’s five to nine cars per month.
A study from McKinsey & Co. puts the average slightly higher. It shows U.S. car retailers over the last decade have used new technologies including AI and digital sales platforms but, despite their investments, dealership productivity “has remained stuck in a rut, with vehicle sales per employee averaging between 14 and 16 each year.”
Boosting this average means money. Each 1 percent uptick in sales productivity for the average U.S. dealership is worth about $500,000 in revenues, according to McKinsey.
“We estimate that if dealerships used technology effectively across both customer-facing and back-office processes, focused on cutting inventory and other costs, and adopted a clear strategic agenda, they could lift sales per employee by at least 25 percent to 20 vehicles or more per year,” McKinsey’s report said.
How public auto retailers fare in salesperson productivity
Publicly held dealership groups also are shining a spotlight on productivity. Houston’s Group 1 Automotive Inc., in its second-quarter investor presentation, said salesperson productivity was up about 30 percent from 2019 amid an 11 percent decrease in same-store head count in the same time frame.
Group 1 spokesperson Pete DeLongchamps told Automotive News in an email that the company’s online car-buying and car-selling platform AcceleRide empowers customers to complete processes that previously only sales staff could handle. That includes being able to do a soft pull of their credit and receiving an estimated interest rate they may qualify for when buying a vehicle.
AcceleRide allows customers to preselect a vehicle, complete the credit process prior to a dealership visit, calculate lease versus finance versus paying cash, and receive a trade-in value from the dealership.
“Customers often begin the buying process via AcceleRide and come in-store to complete their purchase,” DeLongchamps said. “When customers visit our stores after beginning the selling journey online, we pick up exactly where they left off, making the in-store experience more efficient and quicker, for customers and staff.”
Group 1 ranks No. 4 on Automotive News’ list of the top 150 dealership groups based in the U.S., retailing 175,566 new vehicles in 2023.
Penske Automotive Group Inc. is using conversational AI in sales, service and reception, spokesperson Tony Pordon told Automotive News. This allows for automated interactions with customers to answer basic inquiries.
“The use of these tools provides an opportunity for our employees to be more efficient and is particularly useful for providing quality support after-hours,” Pordon said. “Additionally, we believe it can provide additional data to drive business decisions.”
Penske also uses marketing automation tools to help drive lead generation without manual intervention, contributing to higher productivity levels, Pordon said.
Penske Automotive, of Bloomfield Hills, Mich., ranks No. 3 on Automotive News’ list of the top 150 dealership groups based in the U.S., retailing 229,942 new vehicles in 2023.
Glenn Chin, an analyst at Seaport Research Partners, believes retail salesperson productivity could continue to rise.
“Technology is always improving and more enabling,” Chin said. “But with the implementation of AI, that probably enables further productivity gains, so I don’t think this is the end of it.”
But the salesperson remains integral to the car-buying transaction, Chin said, citing the example of Amazon in December announcing an expansion of its online car-shopping marketplace to 48 cities, but keeping vehicle delivery at dealerships.
Using AI to connect salespeople and customers
When customers are ready to connect with a salesperson at one of Jack Weidinger’s dealerships, he wants staff to be as prepared as possible.
His Weidinger Auto Group owns North Bay Cadillac and North Bay GMC in Great Neck, N.Y.,and Land Rover Freeport, about 20 miles southeast, where he also sells preowned Jaguars and services the luxury vehicles.
Using AI to connect salespeople with potential clients is one of Weidinger’s strategies.
“We have dedicated delivery specialists in some of my stores, and that many [other] Cadillac dealers also use, to help with salesperson productivity, and data-mining tools to put salespeople in front of engaged customers more often,” said Weidinger, chairman of the Cadillac National Dealer Council. “That’s where AI can be a useful tool for dealers in trying to find customers who want to engage, and taking over some of the prospecting.”
Weidinger’s staff also incorporates chat tools and electronic contracting into the sales process to boost productivity, he said.
“We’re seeing our productivity numbers go up as volume increases,” Weidinger said of the number of cars sold per salesperson. “Our [sales] volume is increasing without increasing our head count of salespeople.”
Many customers still want to come to a dealership to finish a transaction
Todd Szott, president of Szott Auto Group with five stores in Michigan, said salesperson productivity at his dealerships post-COVID jumped 50 percent to about 15 cars per month.
He said his group’s salesperson productivity through Decemberaveraged 10 cars per month.
“We were surprised by the quick [post-COVID] rebound in sales, staffing-wise, and it took us a while to catch up, to have enough trained salespeople, and we kinda got away from the digital tools a little bit,” Szott said. “Although an omnichannel process is still very prevalent, lots of customers start their process online and they stop where they feel comfortable. Very few go all the way through purchasing a vehicle online.”
When it’s time to get trade-in values or secure financing, customers want to come to a showroom, said Szott, who is president of the Detroit Auto Dealers Association.
“The customer has kind of shifted back to wanting to do more of that in person,” he said. “It takes more time of the salesperson that goes right back to the productivity that we had pre-COVID.”
Szott said many Detroit-area customers use manufacturers’ employee and friends-and-family discount plans but still want to see their salesperson.
“We’re back to where we were,” Szott said. “That’s not necessarily a bad thing. It’s just we’re giving people the personal touch they want in the showrooms and we’re staffing our dealerships correctly to the volume level based on history.”
Baxter Auto Group’s Anderson agrees on the importance of not relying too much on automation when it comes to customer interaction.
“Along with efficiency, we’ve seen increased customer satisfaction that’s been very clear and consistent,” Anderson said. ”Really, humans are still the best at working through some of the more sophisticated aspects of the deal. We’ll be cautious not to let productivity rise to the level that it would diminish guest experience.”
— Lindsay VanHulle contributed to this report.