Auto dealers' ranks rise for first time in years

And then there were ... more. The number of U.S. auto dealerships grew in 2011 for the first time in years.

By Joseph Sczcesny, The Detroit BureauIt’s become a seeming fact of life that the number of U.S. auto dealers will steadily decline each year – with massive cuts during the industry’s recent downturn — but 2011 saw an unexpected turnaround with the dealer count actually rising for the first time in years.

New research also suggests that if the automotive recovery remains on track, 2012 could be the best year on record for American automotive retailers from a sales per showroom standpoint.

Research firm Urban Science reports the number of dealerships actually increased last year after two years of significant attrition. As of Dec. 31, 2011, there were 17,767 dealerships in the U.S., a 0.6 percent increase from 17,659 in 2010.

In a “normal” year, there is a 2 percent decline in the number of dealerships, making the rise quite significant, said Urban Science vice president John Frith.

The two largest contributors to the turnaround were Fiat, which added 135 dealerships in 2011, and Chrysler-Dodge-Jeep, which added 50 dealerships. Other OEMs also added retailers, but in smaller amounts.

On a state level, the largest increase occurred in California where 31 new dealers opened for business, In addition, New Jersey gained 10 dealerships while Ohio and Florida added nine each, and Texas added eight, according to Urban Science’s figures.

At the same time, there were a total of 29,380 franchises as of Dec. 31, 2011, a 2.4 percent decline from the 30,098 in 2010. This decline is attributed mostly to the final stages of phase-out of Ford Motor Co.’s Mercury brand last year.

(The majority of dealers now represent two or more brands, which is why there are more franchises than dealerships.)

“We have a stabilized, right-sized dealership network that has increased year-over-year for only the second time since we started this census,” said Frith. “Automakers and dealers are in a good, profitable position. To maintain that momentum and keep profitability high, they will need to resist the urge to abandon the expense controls and processes instituted the past few years.”

Based on 2011 vehicle sales of 12.8 million, Urban Science’s analysis of throughput — the average number of sales per dealership — increased approximately 10 percent year-over-year to 719 in 2011, compared with 659 in 2010.

Urban Science estimates that if vehicle sales reach 14 million sales in 2012, average sales per dealer could reach an all-time high, pushing past the old record of 784 set in 2005.

“This year, the key issue for many dealers will be figuring out how to handle a continuing sales influx,” added Frith. “This will shift more focus on ensuring that dealerships are meeting the automakers’ standards for staff, space, facility upgrades, policies and procedures.”

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Mitsubishi ranks as 'most toxic' vehicle, study says

The Mitsubishi Outlander Sport was ranked as the most toxic vehicle base on chemical testing of the interior.

Love that new car smell? Well, it doesn’t love you back, according to a new study of toxic materials released by the flame retardants and plastics that sometimes coat the interior parts of a car.

The study by Ecology Center, an Ann Arbor, Mich.-based environmental organization, found the Mitsubishi Outlander Sport was the "most toxic" vehicle among more than  200 popular 2011 and 2012 vehicles tested for group's annual list.

The car's interior was found to contain bromine and antimony-based flame retardants in the seating and center console, chromium treated leather, and seats containing large amounts of lead. Who’s up for a road trip now?

Mitsubishi was not immediately available to comment.

On the other end of the spectrum, the 2012 Honda Civic ranked as the "least toxic" model with an interior (including fabrics and trim) that’s completely devoid of both bromine-based flame retardants and PVC. It also has “low levels of heavy metals and other metal allergens.” The 2011 Toyota Prius and 2011 Honda CR-Z ranked as Nos. 2 and 3 on the least toxic side of the ledger.

Overall, Ecology Center has rated Honda as the top automaker with respect to healthy car interiors every year since 2007, while Hyundai-Kia was ranked the lowest during the last two years, according to the study.

The Ecology Center says the fumes that create the new-car smell that so many people find pleasant actually come from a chemical cocktail of bromine, chlorine, lead and other heavy metals used in automotive interiors.

“Since these chemicals are not regulated, consumers have no way of knowing the dangers they face," said Ecology Center research director Jeff Gearhart in a statement. "Our testing is intended to expose those dangers and encourage manufacturers to use safer alternatives.”

Its report, Toxic at Any Speed, says that driver and passenger exposure to these materials has been linked to allergies, birth defects, liver toxicity and cancer, and says the linkage is corroborated by a two-year study conducted by Commonwealth Scientific and Industrial Research Organisation, Australia’s national science agency.

The potential toxicity of automotive interiors hasn't received much attention from the U.S. Environmental Protection Agency, although the U.S. agency does acknowledge the phenomenon of harmful building materials. A separate study from the Technical University of Munich in Germany conflicted with Ecology Center's findings, showing that the compounds in “new car smell” weren’t toxic but could aggravate allergies in some people.

Either way, the amount of plastics used in vehicles grew from 22 pounds in 1960 to over 250 pounds today, according to the group's website, HealthyStuff.org, although some 17 percent of new vehicles now have PVC-free interiors, and 60 percent are produced without bromine-based flame retardants in the interiors.

HealthyStuff.org says that it “only tests for a limited set of chemical hazards."

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