Industry Analysis & Industry Trends
While the recession hit new car dealers hard, the industry has since recovered in the five years to 2014. increased discretionary spending and elevated confidence have led consumers to once again pursue big-ticket items, such as new vehicles. In addition, interest rates have plummeted, making the cost for consumers to finance vehicles relatively more affordable. In the five years to 2019, revenue for the New Car Dealers Industry is forecast to grow. Continued gains in consumer confidence will drive the industry's recovery, and increased discretionary spending will support greater demand for cars, SUVs and light trucks. Moreover, new vehicle introductions will drive consumer traffic to car dealers, thus, aiding revenue growth... 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