The Growing Importance of Auto Dealership Construction

There’s an interesting trend that can be observed in the automotive industry. Every year, more and more consumers are turning away from purchasing cars at established car dealerships and opting for new-car sales by other means. This trend is not only taking place in the US and Canada, but has also been occurring in Europe, and has recently hit Asia. Here are the main reasons why the auto industry is growing increasingly more competitive:

The low cost of building a dealership

Companies that construct auto dealerships can potentially cut down the startup cost of their operations by as much as 30% without reducing quality. These costs include everything from rent to construction materials, and salespeople. As a result, more and more companies are deciding to build their own dealerships to save money, which is great news for consumers.

The continual growth of consumers

It is estimated that the number of vehicles sold in the US are expected to increase by as much as 17 million units in 2010. This growth is not only due to expansion from foreign car manufacturers, but also from an increasingly robust market for used vehicles. In doing so, first-time car buyers will be increasingly more available.

The Right Culture Creates Awesome Car Dealerships | WardsAuto

The need for new jobs

With the low cost of auto dealership construction, the employment rate at dealerships can go up and down with it. A new dealership can create up to 170 new jobs. It is estimated that 12 people are needed to run a dealership. This would mean that the creation of a dealership can create up to 2,680 new jobs.

Car dealerships have high profit margins

Dealerships have higher profit margins than other industries, even though they often have lower sales volume and net profit per unit sold in comparison. This is because dealerships only need to pay for a small portion of their expenses, and that most of their profit comes from the sale price they are able to negotiate with customers, who are attracted by the repairs that dealerships offer.

The growing competition

In addition to the previously mentioned reasons, auto manufacturing companies can now choose more easily between selling it’s products directly from their factories, or through car dealerships. This gives the auto industry a lot more choice in terms of selling its products.

The Growing Importance of Auto Dealership Construction

As the auto industry grows and sales increase, so does this trend. With the help of auto dealership construction, car manufacturers and dealerships can both expand to accommodate for their increasing customer base.

As more people become interested in purchasing cars and using car dealerships, competition between different manufacturers is also increasing. In doing so, car manufacturing companies are beginning to look at other options in terms of selling their products, which is causing even more growth in the auto industry.