How to open a car dealership

Business ideas by directions

Opening a car dealership these days is not only very expensive, but also a very risky undertaking. Due to the depreciation of the ruble and political problems, the demand for some brands of cars has significantly decreased.
However, in general, the car sales business still remains among the market leaders.
Temporary decline in demand is never long, the number of cars is growing every year, with the majority of car enthusiasts preferring to buy new cars. And since the cost of the car is high, then the income of the car dealership from the sale of each car is very impressive.
The implementation of a car dealership business idea requires rather big investments.
The most realistic way to become a car dealer is to buy a franchise. However, it should be taken into account that the franchise requires the exact fulfillment of the conditions in which everything is provided for to the smallest detail, up to the design of the salon and the equipment of the parking lot nearby. The fulfillment of these conditions is possible only with financial investments, which amount to hundreds of thousands of dollars. Therefore, before you start building a car dealership, you need to choose a brand and find out what costs will be required to start a business. And the right choice of brand is possible only on the basis of marketing research, which can be used to assess the demand for cars and possible sales volumes.

Choosing a brand is only the beginning of the journey to open your own car dealership.

After all, the most important thing is to conclude an agreement with the manufacturer and get the right to sell cars. And negotiations with the manufacturer are almost always difficult, since the future dealer needs to justify the prospects for sales and convince the manufacturer of its reliability. At this stage, you can not do without a high-quality business plan and accurate calculations.

The profitability of the future car dealership, of course, depends on sales volumes.

But, besides this, often a franchise provides for the presence of additional services as part of a car dealership, for example, a car service center for car warranty service. Very often, among the requirements is also the opening of a store selling branded components.
All this can become a source of additional income, or it can turn into ballast, which will reduce the overall profitability of the enterprise.
As a rule, manufacturers’ requirements for the structure of a car dealership are based on many years of successful sales experience. So you should consider these requirements carefully and try to extract the maximum profit from additional services.

A high-quality business plan for a car dealership will help you choose the right strategy for building a business and quickly recoup your investment in its creation.