Automobile Dealers

Automobile Dealers

Brief Excerpt from Industry Overview Chapter:

Companies in this industry engage in retail sales of new and used passenger cars, light trucks, SUVs, and passenger and cargo vans. Major companies include AutoNation, CarMax, Penske Automotive Group, Sonic Automotive (all based in the US), as well as Inchcape plc (UK), Jardine Cycle & Carriage (Singapore), Porsche Holding GmbH (Austria), and Zhongsheng Group Holdings Limited (China).

The global automobile dealer industry generates more than $2 trillion in annual revenue, according to MarketLine. Leading countries for auto sales outside the mature markets of the US, Europe, and Japan include Brazil, Russia, India, and China (the BRIC nations), with China being by far the largest. The Chinese automotive market, based on unit sales, is larger than those of the three other BRIC nations combined.

The US automobile dealer industry includes about 50,000 new and used vehicle dealers with combined annual revenue of about $700 billion and is expected to experience a moderate rate of growth in the next two years. Key growth drivers include a rapidly aging US car fleet, pent-up demand as a result of the late-2000s recession, and loosening credit markets.

COMPETITIVE LANDSCAPE

Consumer spending and interest rates drive demand for cars. The profitability of individual companies depends on the volume and mix of cars and services sold. Large companies can offer a wider selection of cars and have advantages in marketing, purchasing, and finance. Small companies can compete effectively by offering superior customer service or serving...