Industry Analysis & Industry Trends
The Used Car Dealers industry has shifted gears and taken off at full speed over the five years to 2017. As economic conditions improved and consumer spending began to rise over the period, consumers released pent-up demand for big-ticket purchases, such as automobiles. Moreover, consumers, still wary of the economic climate, increasingly opted to purchase used vehicles over new ones, helping to boost industry sales. Consequently, this renewed demand has driven industry revenue to grow. These trends are expected to continue over the five years to 2022. However, the overnight rate is expected to rise over the next five years, making vehicle financing more expensive and therefore, less desirable. As a result, demand for used vehicles is expected to slow during the period... 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 just one 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 encounter 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.
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