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Automobile DealershipsPublished by: First Research, Inc. Published: Sep. 29, 2008 - 10 Pages Table of Contents
AbstractThe automobile dealer industry includes about 50,000 new and used vehicle dealers with combined annual revenue of $770 billion. Major companies include AutoNation, Penske Automotive Group, Sonic Automotive, and CarMax. The industry is highly fragmented: the top 50 companies have less than 15 percent of industry sales. COMPETITIVE LANDSCAPE Consumer spending and interest rates drive demand. 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 a local market. Annual revenue per worker averages $600,000 for new car dealerships and $700,000 for used. For vehicle sales, auto dealers compete with private market sellers, who are increasingly using the Internet to bypass traditional retail channels. Companies compete with various retail outlets, such as oil change centers, tire stores, and independent service shops and chains, for service revenue. PRODUCTS, OPERATIONS & TECHNOLOGY Products sold include new cars (60 percent of industry sales); used cars (30 percent); and services and parts (10 percent). Sales of financing plans, extended warranties, insurance, and accessories generate aftermarket income. New car dealers have franchise agreements with car manufacturers, which give dealerships non-exclusive rights to sell certain brands of cars and offer related parts and services within a specified market area. Franchise agreements typically impose various requirements ... Get Full Details About This Report >> |
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