Industry Analysis & Industry Trends
The past five years have been chaotic for the automotive sector. As new vehicle sales slowed, new car dealers increasingly looked to their parts and service departments for revenue. Over the five years to 2019, new car dealers will continue to shift to parts-and-service-oriented business models to revive revenue. Additionally, the introduction of new European-based models that cater to consumer preferences of fuel efficiency will encourage drivers to trade in for new cars... purchase to read more
Industry Report - Industry Investment Chapter
New car dealerships require salespeople, technicians and office workers to operate. Labor costs have been volatile over the past five years. For example, wages are expected to account for about 7.7% of industry revenue in 2014, down from 8.2% in 2009. Wage declines in 2009 were largely due to layoffs and dealer closures brought on by the recession and General Motors' bankruptcy filing.
Industry depreciation costs are low. By classifying vehicles as short-term assets, new car dealers tend to avoid significant depreciation expenses. Service equipment and the physical dealership are the industry's primary long-term assets. The industry spends about $0.04 on capital for every dollar spent on labor... purchase to read more