Before opening a car dealership, each entrepreneur must carefully study the niche, compare the advantages and disadvantages of this business, calculate the upcoming costs, decide on the choice of suppliers, premises and equipment. Be sure to register, make the appropriate calculations, etc.
Car dealership: niche assessment
The capital investment when opening a car dealership is quite significant, but quite payback. For a business to grow quickly, it is necessary to sell not only cars, but also a variety of accessories and even spare parts. If you have enough money, you can additionally open a car workshop directly next to the car dealership.
It is very profitable to open car dealerships in cities or areas where there are no competitors or their number is minimized. Today, many car enthusiasts prefer to buy used cars. Therefore, it would be nice to think about providing this service. Moreover, there is no need to make investments in this case. If the car service has a regular clientele, you can earn about 100,000 rubles a month (after deducting all expenses), thanks to which you will return the money invested in a few months.
You need to know that in the first 2-3 months your business will not bring the desired result. You might even say that it will be difficult for you to cover the costs. However, do not despair - as soon as sales start, your customer base will increase, and your income will become tangible.
You can learn how to become a real dealer of the automotive industry, determine a niche and what risks you may face in the video:
Advantages and disadvantages
Business advantages:
- good demand for cars, both new and used, as the number of consumers is growing;
- if you sell parts and accessories in parallel, you can have additional income;
- you do not need to have special education or experience to open a business;
- high income;
- by creating a worthy advertisement, you will quickly find new customers;
- stability.
Disadvantages:
- investing a very large amount;
- return on investment only comes in a few months.
Profitability
It is almost impossible to calculate the profitability of the business of creating your own car dealership, since it depends on sales. However, if we consider the main costs in percentage terms, then the picture is approximately the following:
- the cost of purchasing cars is 90-92%;
- staff salary - 0.6%;
- purchase of accessories and spare parts - 2%;
- taxation is 2%;
- you will spend about 0.4% on advertising;
- technical support - 1%.
As a result, it turns out that you have 2-4% left. If you additionally sell used cars, then the income will be much higher, since you do not need to invest your own funds in such cars.
The presence of a large number of car enthusiasts in Russia proves once again the huge potential of the new and used car market. Stably high demand on a car gives rise to the idea of \u200b\u200bopening their own car dealership in the minds of some businessmen.
In most cases, the idea remains in the air due to a lack of funds, persistence and necessary knowledge. Only a few go through a thorny path and create a business that brings stable profits.
For business to be successful
- start working with the sale of cars of famous brands. You can save on advertising. Toyota - it is in Africa Toyota;
- choose the first cars from the budget segment. This makes it easier to find clients and build up working capital. When you are firmly on your feet, you can move on to cars of the middle price category or cars of the "premium" class;
- provide a wide range of models so that the buyer has a choice;
- it is important to provide the client with as many additional services as possible in one place so that he or she turns to your salon again and again. Many successful car dealers claim that aftermarket profits often exceed auto sales. Repair shops, a service station, an experienced specialist in car tuning, a store selling auto parts, banking services for lending car purchases, the presence of an agent of a reputable insurance company in one place will significantly expand the opportunities for making a profit. A positive reputation for your car dealership will be ensured;
- learn a simple rule that short-sighted businessmen often violate - do not skimp on staff. An employee's interest in improving his qualifications and a decent salary depending on his personal contribution will make it possible to form a strong team of competent specialists on whom you can rely. Selling cars is a complex project. And amateurism will not work here;
- only the best specialists should work in your car service. A competent auto electrician Vasya, whom the whole city knows, will have a queue of people wishing to get advice from him. We'll have to sweat looking for such specialists. Offer decent wages and do not violate your financial obligations, which businessmen often sin. Then the pros will work for you, and a constant stream of customers will be provided.
First steps to open a car dealership
Please be patient, because the path from construction to stable operation of the enterprise will be quite long.
Step # 1. Decide which cars will be sold in your showroom. There are several directions:
- purchase of a franchise and further arrangement of the premises in accordance with the requirements that are negotiated upon purchase. An excellent option if you own a ready-made premises or land plot suitable for placing an auto center. It is important that the car brand is promoted;
- if you have a prepared premises, you can immediately start selling both new and used cars;
- you can build and open a car dealership from scratch. First you have to buy land plot or finished premises.
Step # 2. Calculate the profitability of your business. You will need a sound business plan.
Serious business is a serious cost. To create and "promote" a car dealership with an area of \u200b\u200babout 500 square meters, you will need at least 15 million rubles. A high-class specialist will not only develop a business plan for a car dealership, taking into account a specific city, region, the level of purchasing power of the population, but also calculate how quickly your project will pay off.
It is important to understand that with a sufficient level of sales and a level of profitability for dealerships at the level of 2-3%, your investment will return no earlier than 5 years. If you expect to make a profit earlier, invest in other activities. Experts believe that the fastest way to pay off the costs is when selling used foreign cars, available to the general public.
Step # 3. Analyze the level of sales of various car brands in the selected region. Statistics will show whether it is profitable to open another center for the sale of cars of your chosen brand, or the market is already saturated with such offers.
Step # 4. Learn all the intricacies of running this business, attend trainings and business seminars, take training in special courses. If you are not ready to learn, do something simpler.
Where to place a car dealership
It is important to choose the right location for the dealership. In large cities, it is better to locate an object in the center, where a well-to-do contingent of buyers gathers, offices and various institutions are located. In a province, a car dealership may be located on the outskirts. The main thing is convenient access roads to it and the availability of qualified personnel, in particular, the masters of the maintenance station.
The showroom can be located in:
- the former car park. Get ready to pay for rent every month from $ 200 to 500 per square meter;
- suitable for the area of \u200b\u200bthe structure, which can be reconstructed. The restructuring costs will be about $ 1 million;
- it is possible to build a center for the sale of a car from scratch, your own. The costs for creating a complex meeting world standards will amount to at least $ 3 million.
If you are planning to become a dealer of famous car brands, give preference to the latter option.
Showroom area
To create a full-fledged complex, which will include, in addition to an exhibition hall (300 sq. M.), service center (200 sq. M.), An auto parts store (100 sq. M.) And office space (100 sq. M.), You will need a room of at least 700 sq. M. m.
What you need to open a car sales center
Register your company. LLC () is an acceptable option when opening a car dealership.
The next step is registration with the tax office. To your business will be applied to commercial businesses.
In the tax office, indicate the following:
- trade in motor vehicles;
- maintenance and repair of vehicles;
- trade in auto parts, assemblies and accessories;
- activities of dealers.
Register in all required funds:
- pension fund;
- Rospotrebnadzor;
- state fire supervision.
Further steps
- Open an account with a reliable bank.
- Buy a cash register and register it with the tax office.
- Contact the Consumer Market Authority for certification. Your dealer company will be entered into a special register.
- If you plan to open a car service in a complex with a car dealership, you should contact Rostest and get certificates for additional types of work. Some of them (body repair, for example) may require a certain distance to residential objects.
Car Suppliers
Choose reliable suppliers and well-known car brands. Analyze which brands are missing in your region, and which ones it is jaded.
Before opening a car dealership, find out the paying capacity of the population. If there are few wealthy clients in the region, work with cars that cost no more than $ 20-25 thousand. It might be worth opening a used car dealership.
It is imperative to purchase several cars for a test drive at your dealership.
Find out the terms of car delivery. You can buy cars in the country of origin. In this case, all the problems associated with delivery from the factory gates to the doors of the car dealership fall on the shoulders of the dealer.
The second option is to buy cars from Russian official importers. Many foreign companies that produce quality products give priority to centralized supplies. Customs clearance and car transportation to Russia is an importer's headache.
The costs in both cases are almost the same, but the second option is more acceptable for beginners.
How to become a car dealer
Your steps:
- you have already decided on the brand of car. Send your request to the official representative of this company in the Russian Federation. Representative websites can be found on the Internet;
- prepare a business plan for opening a car dealership;
- fill out the questionnaires sent by the representative, familiarize the supplier with your business plan;
- the next step is talking to the manager. Your task is to convince him that it is you who will be able to ensure a high level of car sales and mutually beneficial cooperation;
- if the personal meeting goes well, you will be offered cooperation;
- followed by the signing of an agreement of intent. All the nuances will be spelled out in it: construction time, procedure and terms for the purchase of equipment and cars, sales plans, types promotions.
- After approvals, a dealer contract is concluded, which is the basis for cooperation between companies.
Important: at the first request of the buyer, you must present certificates for the car and this contract.
Business promotion
An important detail is the name of the car complex. It must be catchy, memorable, and must contain the brand name (if it is not a multi-brand car dealership).
Car dealership survival threshold
In order for a car dealership to function normally and gradually become profitable, the volume of sales of cars in the middle price category should be at least 60–70 units per year. The sufficient level of sales of premium cars is slightly lower.
How many vehicles do you need to keep in stock?
The chosen brand plays a primary role. If the range is wide enough, then more cars will have to be kept in stock. The owners of car dealerships believe that at any time in the warehouse there should be a volume of cars that is 2 times higher than the planned implementation.
If you've sold one of your line-ups, you should be able to replace it with another one right away so that this model isn't missing from the showroom.
Auto prices and margin
Each of the manufacturers sets prices for their car dealers, which they must adhere to. In Russia, the size of the margin that contributes to the development of the enterprise ranges from 8 to 15%.
The dealer has the right to set discounts, carry out promotions to reduce prices in order to attract new customers. Naturally, within its margin.
Return on investment
In Western countries, a profit of 2 to 3% per turnover is considered good. The return on investment is 12 to 20%. In Russia, you can count on a larger percentage of the profit. It is important to choose the right strategy and create all the conditions for effective sales. Competent management, additional services in your car dealership and the availability of specialists "from God" in your car service will increase your profit.
Remember, it's not enough to know how to open a car dealership. It is important to go through all the stages without losing your enthusiasm and to constantly improve the level of knowledge on the organization of auto business in the salon. It is important for a manager to understand all the intricacies of selling a car. Only then will his enterprise be successful and in time will surely become profitable.
Owning your own car dealership is the dream of many men and women. This branch of business is very interesting, and can bring considerable income, but, unfortunately, when opening a salon, many start-up entrepreneurs face problems associated with a lack of skills and experience in this area. To help cope with emerging difficulties can ready business plan car dealership, after reading which you can calculate your actions in the auto business a few steps ahead.
Choosing a car brand for the salon
Before opening your own car dealership, you will need to decide on the brand of cars that you want to sell and buy a franchise. A franchise implies a contract in accordance with which you will have to arrange and equip a car dealership according to the company's standards.
Buying a franchise will be convenient for those entrepreneurs who already have premises in which they want to open their salon.
Nowadays, many car buyers opt for new cars rather than used ones. While the demand for new cars is not only protected, but also increases, the auto business will be able to bring considerable profit to the entrepreneur who can competently organize a business by arranging supplies and presenting a wide range of current models in his salon, excluding low-speed cars from the sale.
Car dealership services
Having decided on the concept of your business and deciding to open a car dealership, you must organize in it not only the sale of cars, but also their repair and maintenance. Additional income you will be able to bring the sale of spare parts and accessories in the salon.
Dealership location
The best way is to open a car showroom next to a busy highway or motorway. Before opening a showroom, find out which car brand is not yet available for wide sale in your city, and give your preference to it: this will help you attract the largest number of buyers and solve the problem of competition.
When purchasing or renting a building for a car dealership, try to find a large enough room: the minimum size of its area should be 300 square meters. Large panoramic windows should go onto the roadway through which the cars put up for sale will be visible to buyers.
If you can't find a room with the required parameters, start looking for a land plot to build a new building for a car dealership.
Staff
Qualified and well-trained personnel play a huge role in the success of the automotive business, therefore, the selection of salon employees must be approached very responsibly and seriously. First of all, you need to find a good HR manager who will deal with the selection and placement of personnel, as well as establish the rules for working with clients.
When hiring employees, it is necessary to give them a guarantee of a high salary level and the possibility of undergoing sales trainings aimed at improving their qualifications.
A candidate for the position of a sales assistant for your car dealership must have a set of the following personal qualities and characteristics:
- sociability
- the ability to listen to the client and determine his needs
- resistance to stress
- patience
- ability to handle objections
When recruiting staff, try to hire people with good experience in this field of activity.
The most optimal is to hire people who have worked in the showrooms of large high-class dealerships, for example, BMW or Audi.
Such people are guaranteed to be already trained in various subtleties and techniques of successful work in a car dealership, and, most likely, will show good results when selling your cars.
Car dealership advertisement
The owners of car dealerships receive almost half of the income from the sale of cars and component parts by attracting customers through advertising. The most affordable and effective way to get the word out about your car dealership to buyers is to publish notes about it in local newspapers. Through them, you can tell customers about the location of your salon, prices, discounts and promotions.
Also a good way to advertise a car dealership is to distribute leaflets on the streets of the city. All of this will help you increase the growth in demand for your car dealership's vehicles. You will need to include advertising costs in your car dealership business plan in advance.
Car dealership advertisement
On average, to open a car dealership in a regional city, you will need an initial capital of about $ 800,000. If you already have a ready-made premises, and do not have to spend money on the construction of a new building, costs will be reduced by about $ 200,000.
If you open your salon in a large city or in the capital, the amount of expenses can increase up to $ 6,000,000. Below is a table showing a rough cost estimate based on a 300 square meter salon business plan for 15 mid-range cars.
Income
The main source of income for the owner of a car dealership is the sale of cars, an additional source of income is the provision of maintenance and repair services, as well as the sale of spare parts and accessories.
Compliance with the level of profitability of the business in 10%, and accordingly, maintaining its break-even, you will be provided with the sale of 50 cars per year.
conclusions
Subject to the rules and proper business organization, your salon will pay off and start making a profit in 3-4 years. To organize your business well, download a ready-made car dealership business plan.
The presence of a large number of car enthusiasts in Russia proves once again the huge potential of the new and used car market. The consistently high demand for cars gives rise to the idea of \u200b\u200bopening their own car dealership in the minds of some businessmen.
In most cases, the idea remains in the air due to a lack of funds, persistence and necessary knowledge. Only a few go through a thorny path and create a business that brings stable profits.
For business to be successful
- start working with the sale of cars of famous brands. You can save on advertising. Toyota - it is in Africa Toyota;
- choose the first cars from the budget segment. This makes it easier to find clients and build up working capital. When you are firmly on your feet, you can move on to cars of the middle price category or cars of the "premium" class;
- provide a wide range of models so that the buyer has a choice;
- it is important to provide the client with as many additional services as possible in one place so that he or she turns to your salon again and again. Many successful car dealers claim that aftermarket profits often exceed auto sales. Repair shops, a service station, an experienced specialist in car tuning, a store selling auto parts, banking services for lending car purchases, the presence of an agent of a reputable insurance company in one place will significantly expand the opportunities for making a profit. A positive reputation for your car dealership will be ensured;
- learn a simple rule that short-sighted businessmen often violate - do not skimp on staff. An employee's interest in improving his qualifications and a decent salary depending on his personal contribution will make it possible to form a strong team of competent specialists on whom you can rely. Selling cars is a complex project. And amateurism will not work here;
- only the best specialists should work in your car service. A competent auto electrician Vasya, whom the whole city knows, will have a queue of people wishing to get advice from him. We'll have to sweat looking for such specialists. Offer decent wages and do not violate your financial obligations, which businessmen often sin. Then the pros will work for you, and a constant stream of customers will be provided.
First steps to open a car dealership
Please be patient, because the path from construction to stable operation of the enterprise will be quite long.
Step # 1. Decide which cars will be sold in your showroom. There are several directions:
- purchase of a franchise and further arrangement of the premises in accordance with the requirements that are negotiated upon purchase. An excellent option if you own a ready-made premises or land plot suitable for placing an auto center. It is important that the car brand is promoted;
- if you have a prepared premises, you can immediately start selling both new and used cars;
- you can build and open a car dealership from scratch. First, you have to buy a land plot or a finished building.
Step # 2. Calculate the profitability of your business. You will need a sound business plan.
Serious business is a serious cost. To create and "promote" a car dealership with an area of \u200b\u200babout 500 square meters, you will need at least 15 million rubles. A high-class specialist will not only develop a business plan for a car dealership, taking into account a specific city, region, the level of purchasing power of the population, but also calculate how quickly your project will pay off.
It is important to understand that with a sufficient level of sales and a level of profitability for dealerships at the level of 2-3%, your investment will return no earlier than 5 years. If you expect to make a profit earlier, invest in other activities. Experts believe that the fastest way to pay off the costs is when selling used foreign cars, available to the general public.
Step # 3. Analyze the level of sales of various car brands in the selected region. Statistics will show whether it is profitable to open another center for the sale of cars of your chosen brand, or the market is already saturated with such offers.
Step # 4. Learn all the intricacies of running this business, attend trainings and business seminars, take training in special courses. If you are not ready to learn, do something simpler.
Where to place a car dealership
It is important to choose the right location for the dealership. In large cities, it is better to locate an object in the center, where a well-to-do contingent of buyers gathers, offices and various institutions are located. In a province, a car dealership may be located on the outskirts. The main thing is convenient access roads to it and the availability of qualified personnel, in particular, the masters of the maintenance station.
The showroom can be located in:
- the former car park. Get ready to pay for rent every month from $ 200 to 500 per square meter;
- suitable for the area of \u200b\u200bthe structure, which can be reconstructed. The restructuring costs will be about $ 1 million;
- it is possible to build a center for the sale of a car from scratch, your own. The costs for creating a complex meeting world standards will amount to at least $ 3 million.
If you are planning to become a dealer of famous car brands, give preference to the latter option.
Showroom area
To create a full-fledged complex, which will include, in addition to an exhibition hall (300 sq. M.), A service center (200 sq. M.), An auto parts store (100 sq. M.) And office premises (100 sq. M.), You will need a room not less than 700 sq. m.
What you need to open a car sales center
Register your company. LLC () is an acceptable option when opening a car dealership.
The next step is registration with the tax office. To your business will be applied to commercial businesses.
In the tax office, indicate the following:
- trade in motor vehicles;
- maintenance and repair of vehicles;
- trade in auto parts, assemblies and accessories;
- activities of dealers.
Register in all required funds:
- pension fund;
- Rospotrebnadzor;
- state fire supervision.
Further steps
- Open an account with a reliable bank.
- Buy a cash register and register it with the tax office.
- Contact the Consumer Market Authority for certification. Your dealer company will be entered into a special register.
- If you plan to open a car service in a complex with a car dealership, you should contact Rostest and get certificates for additional types of work. Some of them (body repair, for example) may require a certain distance to residential objects.
Car Suppliers
Choose reliable suppliers and well-known car brands. Analyze which brands are missing in your region, and which ones it is jaded.
Before opening a car dealership, find out the paying capacity of the population. If there are few wealthy clients in the region, work with cars that cost no more than $ 20-25 thousand. It might be worth opening a used car dealership.
It is imperative to purchase several cars for a test drive at your dealership.
Find out the terms of car delivery. You can buy cars in the country of origin. In this case, all the problems associated with delivery from the factory gates to the doors of the car dealership fall on the shoulders of the dealer.
The second option is to buy cars from Russian official importers. Many foreign companies that produce quality products give priority to centralized supplies. Customs clearance and car transportation to Russia is an importer's headache.
The costs in both cases are almost the same, but the second option is more acceptable for beginners.
How to become a car dealer
Your steps:
- you have already decided on the brand of car. Send your request to the official representative of this company in the Russian Federation. Representative websites can be found on the Internet;
- prepare a business plan for opening a car dealership;
- fill out the questionnaires sent by the representative, familiarize the supplier with your business plan;
- the next step is talking to the manager. Your task is to convince him that it is you who will be able to ensure a high level of car sales and mutually beneficial cooperation;
- if the personal meeting goes well, you will be offered cooperation;
- followed by the signing of an agreement of intent. All the nuances will be spelled out in it: construction time, procedure and terms for the purchase of equipment and cars, sales plans, types of promotions.
- After approvals, a dealer contract is concluded, which is the basis for cooperation between companies.
Important: at the first request of the buyer, you must present certificates for the car and this contract.
Business promotion
An important detail is the name of the car complex. It must be catchy, memorable, and must contain the brand name (if it is not a multi-brand car dealership).
Car dealership survival threshold
In order for a car dealership to function normally and gradually become profitable, the volume of sales of cars in the middle price category should be at least 60–70 units per year. The sufficient level of sales of premium cars is slightly lower.
How many vehicles do you need to keep in stock?
The chosen brand plays a primary role. If the range is wide enough, then more cars will have to be kept in stock. The owners of car dealerships believe that at any time in the warehouse there should be a volume of cars that is 2 times higher than the planned implementation.
If you've sold one of your line-ups, you should be able to replace it with another one right away so that this model isn't missing from the showroom.
Auto prices and margin
Each of the manufacturers sets prices for their car dealers, which they must adhere to. In Russia, the size of the margin that contributes to the development of the enterprise ranges from 8 to 15%.
The dealer has the right to set discounts, carry out promotions to reduce prices in order to attract new customers. Naturally, within its margin.
Return on investment
In Western countries, a profit of 2 to 3% per turnover is considered good. The return on investment is 12 to 20%. In Russia, you can count on a larger percentage of the profit. It is important to choose the right strategy and create all the conditions for effective sales. Competent management, additional services in your car dealership and the availability of specialists "from God" in your car service will increase your profit.
Remember, it's not enough to know how to open a car dealership. It is important to go through all the stages without losing your enthusiasm and to constantly improve the level of knowledge on the organization of auto business in the salon. It is important for a manager to understand all the intricacies of selling a car. Only then will his enterprise be successful and in time will surely become profitable.
Attention! The free business plan offered for download below is an example. The business plan that best suits your business conditions needs to be created with the help of specialists.
The car market is trying with all its might to rectify the situation in the country - to transfer motorists from domestic and old to new foreign cars. As long as this trend continues, the winner will be the one who can competently draw up a business plan for a car dealership and start a business.
True, large investments will have to be made - from about $ 5 million. Moreover, the costs will be recouped only after 4 years from the date of the start of this business. Competition in this area is quite high and increases with the change of model year.
Then the supplier does his best to make the offer as attractive as possible - from discounts and bonuses to accompanying gifts. For successful activity, you need to draw up a business plan for a car dealership.
There are several options for developing a business for opening a car dealership - building assembly plants, service and sales network. In any case, for the sale of cars, an official representative is needed, otherwise referred to as a dealer.
In car sales, the brand doesn't really matter. There are several guidelines to consider:
- - you can enter the business by starting with inexpensive cars and gradually moving to premium class brands;
- - it is better to choose the model range of the importer who officially supplies the cars. This will facilitate the process of purchasing and delivering to a car dealership;
- - the more diverse the model of a certain brand, the more difficult it is to calculate the needs of potential buyers;
- - so far, foreign trucks are in favor, which are actively moving to the market.
Consider the prospect of selling used cars.
Recently, European trends have begun to enter the practice - you rent out a used car and buy a new one with a surcharge.
True, the percentage of sales in this way is not very high - only 1 in 10.
But, as an option, you can try by drawing up a business plan for a used car dealership.
To join this business, you need to think over the location of the salon and find an interested investor.
Many manufacturers focus not only on the point of sale of vehicles, but also on a comprehensive service center.
There are several options for placing an auto center:
- - the area of \u200b\u200bthe former car parks. however, the rent is from 200 to 500 dollars per sq.m. The minimum required area is 450 sq.m. ;
- - reconstruction of a suitable premises is a very complicated and costly method (it will cost almost a million dollars);
- - construction of middle class auto centers (about $ 2.5 million);
- - construction of a car center according to European standards.
How is the business of opening a car dealership built? An approximate business plan of a car dealership will help answer these questions at the start.
- Purchase of cars in the country of origin through a dealer;
- Purchase of cars from a Russian importer.
Good to know!
We respect your choice, but we want to remind you that the least risky, relatively easy and comfortable start of a business can be organized under the wing of a successful company on a franchise basis. We invite you to get acquainted with.
Why starting a business with a franchise is easier and more convenient can be found in the selection of articles published in the section:
As a benchmark for profit, you can take a sales turnover of up to 400 cars per year, if this is a “premium” class, and up to 1000 for cheaper brands.
As practice shows, for a business to develop successfully and sales of cars to increase, it is necessary to establish a sales plan for a month, for example, it will be 20 cars. The warehouse should then have twice as many, respectively, 40 cars.
The car dealership's income from the sale of cars depends on the volume of sales of a particular brand and the provision of services. It is possible to increase the return on investment by selling related accessories, spare parts, and car alarms.
You can also provide car tuning services - toning, engine tuning. Often in car dealerships you can find a representative from a bank who will offer you a loan. It will be useful to sell cars by trade-in and take out insurance on the spot.
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