Industry Analysis & Industry Trends
The Motor Vehicle Dealers industry has had a bumpy ride for the past five years, despite rebounding strongly after the global financial crisis. Industry revenue has declined, largely due to high fuel prices encouraging consumers to purchase smaller, cheaper and more fuel-efficient cars. As a result, dealerships have been selling higher volumes of cheaper small cars and lower volumes of more expensive large cars, resulting in per-unit revenue declining. Additionally, the combination of strong price competition, improved production efficiencies overseas, a reduction in the motor vehicle tariff and a high Australian dollar has forced overall prices down. While lower prices have benefited the industry by supporting demand, industry revenue is forecast to decline at an annualised 0.6%... purchase to read more
Industry Report - Starting a New Business Chapter
The Motor Vehicle Dealers industry has moderate barriers to entry. Many dealerships are operated under franchise agreements. These can act as a barrier to entry in the industry, as franchisors are able to decide when, where and if further franchise agreements will be let. Franchise agreements may also specify expected sales targets and performance measures. These factors can make it difficult for prospective franchisees to enter the industry.
The costs of entry into franchises, which can be substantial, can also constrain entry into new vehicle dealerships. Larger dealerships can cost up to an estimated $2 million, just for the franchise fee... purchase to read more