Industry Analysis & Industry Trends
As a result of the recession that began in late 2008, consumers facing unemployment and limited disposable income avoided large discretionary purchases, such as cars. Beginning in 2010, however, the economy began to improve and consumer spending began to rise. Rising demand for used vehicles, particularly for those five years and older, will likely lead growth in the next five years. Nonetheless, many firms are expected to forgo significant expansion of their operations. Rather than expanding into new markets with new locations, dealers will instead prefer to increase inventory at their existing retail outlets, hoping to leverage higher sales from an existing customer base... purchase to read more
Industry Report - Starting a New Business Chapter
Barriers to entry in the Used Car Dealers industry are moderate. Barriers include high competition levels and start-up costs. The industry is highly fragmented, with no company holding a significant market share of more than 5.0%. This low concentration leads to high competition that is often based on price and can make it difficult for new entrants to generate a high profit margin.
Dealers entering the industry face significant capital costs; industry operators must make large, up-front investments in inventory purchases and dealership lots. New entrants also need to be aware of the appropriate value and demand for used vehicles to avoid holding obsolete inventory... purchase to read more