Industry Analysis & Industry Trends
The Motor Vehicle Dealers industry has had a bumpy ride over the past five years, despite rebounding strongly following the global financial crisis and the 2010-11 Japanese tsunami. High fuel prices early in the period encouraged consumers to purchase smaller, cheaper and more fuel-efficient cars. Dealerships have therefore 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 for much of the period has forced overall prices down... 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 granted. 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