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New Car Dealership

New Car Dealership

$1,000.00
$1,000.00
Sale Sold out

Executive summary

Operators in the New Car Dealers industry sell new and used passenger vehicles, provide repair and maintenance services and offer financing and insurance options. The industry is highly cyclical in nature and vulnerable to economic shifts, such as fluctuations in employment, consumer confidence and interest rates. Over the five years to 2022, industry revenue is expected to increase at an annualized rate of 2.7% to $1.2 trillion over the five years to 2022, including an increase of 3.7% in 2022. This increase in revenue throughout the period comes despite the negative effect of the COVID-19 (coronavirus) pandemic. The pandemic induced decline in consumer spending contributed to an estimated 5.1% decline in 2020 revenue. Subsequent slowdowns in factory production has lead to ongoing shortages for parts, computer chips and so new cars themselves. As supply fell, the skyrocketing price of new vehicles lead to revenue increasing an estimated 16.4% in 2021. Operators have performed particularly well in high income states with limited public transport, such as California and Texas, after urban residents fled coronavirus and high cost of living in Norther states. Additionally, the low volume of actual sales limited hiring for new salesman and boosted industry profit.
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Each report includes:

industry revenue;

industry profit;

industry margin;

industry employment;

industry major players;

industry key external drivers;

industry product & structure segmentation;

industry key trends;

industry Life Cycle;

industry Geographic Breakdown;

industry Key Success Factors;

industry Key statistics for previous years;

forecast of industry Key statistics for the next 5 years;

Reference Wordlist

BARRIERS TO ENTRY
High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry.

CAPITAL INTENSITY
Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor.
IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than $ 0.333 of capital to $ 1 of labor; medium is $ 0.125 to $ 0.333 of capital to $ 1 of labor; low is less than $ 0.125 of capital for every $ 1 of labor.

CONSTANT PRICES
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e. year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the "real" growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator.

DOMESTIC DEMAND
Spending on industry goods and services within the United States, regardless of their country of origin. It is derived by adding imports to industry revenue, and then subtracting exports.

EMPLOYMENT
The number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers and executives within the industry.

Colloquial Terminology

BIG THREE
Industry term for the three largest domestic automakers, which include General Motors Company, Ford Motor Company and Fiat Chrysler Automobiles NV.

FLOOR PLAN FINANCING
A type of financing used to fund purchases of vehicles intended for sale.

LIGHT DUTY VEHICLE
A passenger vehicle, sport utility vehicle or truck weighing fewer than 14,000 pounds.

POWERTRAIN
A vehicle's engine and transmission combination.

SURETY BOND
A three-party agreement in which the third-party, or surety, agrees to fulfill contractual obligations.

TERM ASSET-BACKED SECURITIES LOAN FACILITY (TALF)
A Federal Reserve program that issues asset-backed securities collateralized by student loans, auto loans, credit card loans and loans guaranteed by the Small Business Administration.

Details

Many consumers choose to finance new and used vehicle purchases. Thus, the industry is sensitive to fluctuations in interest rates. Low interest rates improve profitability for industry operators as floorplan financing, or the expense to finance new vehicle inventory, becomes less costly. In 2022, interest rates have risen from extreme lows to limit recent spikes in inflation. As steep prices weigh on consumers, the limits of the new car market's elasticity are continuously tested. Widespread increases in prices for everyday goods followed by a monetary contraction and lower incomes could be the breaking point for this industry's customers. As a result, revenue growth is expected to slow in 2022.

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