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Automotive Franchise Study

Date Added: October 23, 2009 10:39:33 PM
      These are very hard times for the American automotive industry, but an exclusive franchise study by Franchise Direct has revealed that automotive franchises are doing well nonetheless. With Americans holding onto their cars longer than ever, Franchise Direct’s analysis of the Franchise Disclosure Documents (FDD’s) of 30 automotive franchises found that more and more drivers are turning to franchises to keep their car on the road.

      The endemic problems in America’s car industry have been well-documented. But Franchise Direct has found that the sharp decline of automotive industry, coinciding with America’s worst economic downturn since the Great Depression, has actually created some exciting opportunities for aftermarket and car rental and sales franchises.

     The reality is Americans are not buying new cars as regularly as they once did. According to this Franchise Direct automotive franchise study, the projected new car sales for this year are 9.7 million units. This constitutes a 40% decline since 2007. Yet Americans continue to love their automobiles. The bottom line is that drivers are becoming more dependent on services provided by automotive franchises because they are choosing to get more life out of their car.
Aftermarket automotive franchises are best positioned to succeed, as consumers seek maintenance and repairs with greater urgency. Used car and rental franchises will also enjoy the benefits of this new reluctance to splurge on new automobiles.

      There are also new niche markets developing for franchising to exploit. In the last few years, drivers have embraced automobiles with complicated engine control, microprocessors and high-tech safety and entertainment equipment. There has also been a movement towards ‘green’ technology in car manufacturing. As these technologies become more and more popular, a new market is growing for aftermarket franchises. Drivers no longer have the know-how to do this complex automotive work on their own and will turn instead to reliable franchise brands.

     The great irony is that the global recession and the collapse of Detroit’s auto industry has opened the door for the recent success of automotive franchises. America’s love affair with the automobile is undiminished, but American’s attitude towards car buying has radically changed. Franchise Direct’s research shows that consumers are turning towards automotive franchises to keep their cars on the road. With the government’s stimulus plan providing economic optimism, Franchise Direct feels that this is an excellent time to consider franchise opportunities in the automotive sector.