Car Dealerships

Theo_Paphitis

Hey Everyone

I’d just like to ask your opinion on Car Dealerships. Do you think now is a good time to invest in one?

Thanks

Theo

RoadKillTs

I'd stick with the stationary business Theo

MB74

Like most businesses it helps to have good contacts when starting out? Do you? Good value for secondhand car dealers with repo's but depends at what level you want to get in at, you would possibly need to invest in stock, site(rent), advertising among others, not that simple to just dip your toe in. Have seen one or two other start ups but they seem to have come out of existing operations.

2qk4u

Its a good time to start due to the amount of cheap surplus stock at the moment, problem is that there will be a period where you have to sit on your stock for a while to wait for the market to improve and to get established.
You will need - contacts, stock source and money to lean on.

Drummerboy08

As someone who is already in the trade, I strongly urge you not to invest.

It will cost a fortune in overheads, showroom, wages, and then you need insurance, and money set aside to aqquire your TAN number from the VRO.

All for very little profit at the minute. Then you have to deal with warranty issues, which can wipe out your entire profit on that car.

It looks like it could be 2011 before things pick up to a reasonable level. Its a long wait.

On the other hand, you will pick up a showroom at a good price. Second hand stocks are low at the minute, so you'll have to go to the UK. You'll need alot of cash to buy decent, sellable cars.

I dont think its worth it tbh.

Theo_Paphitis

I could buy into an exciting car dealership and expand the amount of locations. What do you think?

-Chris-

I'd buy into a dealership and streamline it - prepare it to be strong for the better times. I'd be wary of expanding right now in such a depressed market.

Theo_Paphitis

What do you mean? Cut all the overheads?

-Chris-

If you can. I'd say most dealers have cut overheads to the bone already.

I'd be more thinking of going in with fresh eyes and killing all the sacred cows - sell the current cars at the price they're worth rather than what the current dealer thinks they're worth, have the guts to turn away business that doesn't make sense, make as much of it electronic as possible (customer service, customer follow-up an lead generation, quotes where possible), streamline any systems with regards to admin etc.

I'd say there's a lot of headcount decisions that haven't been made yet either, and those who have been kept have been kept based on length of service rather than excellence. You need to walk in like a dispassionate management consultant and shake the leaves from the tree.

Theo_Paphitis

The main problem seems to be not enough sales. However this is a well established business on a very busy road, it has extremely good potential in better times. Is there any way to expand sales potential without expanding overheads?
I agree with your comments on using electronic format instead of more conventional methods.

MrMatisse

The industry is fcuked, you would have to be mad.

-Chris-

Theo_Paphitis wrote: »

The main problem seems to be not enough sales. However this is a well established business on a very busy road, it has extremely good potential in better times. Is there any way to expand sales potential without expanding overheads?
I agree with your comments on using electronic format instead of more conventional methods.

I don't really think it's an efficiency thing though. I think you can jump in and improve a floundering business, you can make up for the mistakes of the previous owners, you can improve an existing business (if you're actually that good that you can see what the owners have been missing all these years).

I think a lot of it comes down to this:

Theo_Paphitis wrote: »

The main problem seems to be not enough sales.

Who cares about the location or the potential, what are your abilities to increase the sales in a market that's down 70%??