car dealership business plan india

Writing a Car Dealership Business Plan [Sample Template]

By: Author Tony Martins Ajaero

With a population of 1.324 billion as of 2016, india remains a vibrant market for whatever goods or services an entrepreneur decides to go into and if you are interested in starting a business in India, one of your options is to open a car dealership shop; a place where both used and new cars will be retailed. It is indeed a thriving and profitable business in India especially with the growing population of the middle class.

If you are sure this type of business is what you truly want to do after you must have conducted your feasibility studies and market research, then the next step to follow is to write a good business plan; a detailed blue print of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your services amongst others.

The truth is that it is one thing to have a fantastic business plan, but it is another thing for the business plan to translate to profits, which is why it is important to assemble a team of dedicated workers to work with if you want to be successful with your car dealership business.

Below is a sample car dealership business plan template in India that will help you successfully write yours with little or no stress.

A Sample Car Dealership Business Plan Template India

1. industry overview.

Players in the car dealership industry sell both brand new and used cars and they may fall into any of the following niche areas; brick and mortar car dealership shop, online used cars dealership shop, locally produced car dealership shop, imported car dealership shop, luxury car dealership business and multi – brand and multi – maker car dealership.

The auto industry in India is one of the leading auto industries in the globe. As a matter of fact, the auto industry contributes 7.1 per cent of the country’s Gross Domestic Product (GDP). The Two Wheeler segment with 80 percent market share is the leader of the Indian Automobile market owing to a growing middle class.

Additionally, the growing interest of companies in exploring the rural markets further helped the growth of the sector and the overall Passenger Vehicle (PV) segment has 14 percent market share.

Statistics has it that about 4 million cars are manufactured in India, one of Asia’s largest markets in the 2015/2016 fiscal year. The automotive industry in India is growing and becoming more important for Indian citizens with 14.9 million jobs projected to exist by 2022.

India is also one of the leading auto exporters in the world with positive export growth potentials going forward. Lastly, starting a car dealership business just like starting any other business might not be easy but it is a straight – forward business that can generate huge and steady profits if well positioned and properly managed.

People often think that starting this type of business does not require any professional skills; in as much as it is true, you would still need a good knowledge of automobiles, good business skills, bargaining skills and of course customer services skills if indeed you want to build a profitable car dealership business.

2. Executive Summary

Raj Ravi Khan® Car Dealership, Inc. is a registered car dealership shop that will be located in one of the busiest business districts in the city center in Mumbai – Maharashtra. We have been able to lease a facility that is big enough (a 4 thousand square foot facility) to fit into the kind of standard car dealership shop that we intend opening.

At Raj Ravi Khan® Car Dealership, Inc., we will be involved in the sale of both brand new and used cars from different manufacturers from India and abroad. We are set to service a wide range of clientele in and around Mumbai – Maharashtra.

We are aware that there are several car dealership shops all around Mumbai – Maharashtra, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors. We have an online service option for our customers, and our garage is well secured with various payments of options.

Raj Ravi Khan® Car Dealership, Inc. will ensure that all our customers are given first class treatment whenever they visit our garage. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they may grow to. We will ensure that we get our customers involved in the selection of car brands that will be in our garage.

Raj Ravi Khan® Car Dealership, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely whenever they patronize us.

Raj Ravi Khan® Car Dealership, Inc. is a family business that is owned by Raj Ravi Khan and his immediate family members. Raj Ravi Khan is an auto freak with good knowledge of various car brands manufactured both in India and abroad.

He has a robust business network with a host of car manufacturing companies in India. Raj Ravi Khan has plans to open Raj Ravi Khan® Car Dealership, Inc. all across the 29 states and 7 union territories (including a national capital territory) in India.

3. Our Products and Services

Raj Ravi Khan® Car Dealership, Inc. is in the car dealership industry to service a wide range of clients and of course to make profits, which is why we will make available a wide range of both brand new and used cars from top manufacturing brands in India and other countries of the world.

We will ensure that we do all that is permitted by the law of India to achieve our aim and objectives of starting the business.

4. Our Mission and Vision Statement

• Our vision is to build a car dealership business that will become the number one choice for both corporate clients and individual clients in the whole of India.
• Our mission is to establish a car dealership garage business that will make available a wide range of cars from top manufacturing brands at affordable prices to the residents of Mumbai and across all the States in India where we intend opening our car dealership garages and franchise.

Our Business Structure

Our intention of starting a car dealership business is to build a standard car dealership garage in Mumbai – Maharashtra. Although our car dealership garage business might not be one of the biggest in India, but will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.

We will make sure that we recruit people that are qualified, honest, customer centric and are ready to work to help us build a prosperous car dealership business that will benefit all our stake holders. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more.

In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Garage Manager
• Human Resources and Amin Manager
• Merchandize Manager

Sales and Marketing Manager

Information Technologist

• Accountants
• Sales Agents/Customer Services Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defines job positions for recruitment and managing interviewing process
• Carries out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office cum business activities.

Garage Manager:

• Responsible for managing the daily activities in the car garage
• Ensures that proper records of cars are kept and the garage does not run out of used cars
• Ensures that the garage facility is in tip top shape and cars are properly arranged and easy to locate
• Controls car distribution and supply chain inventory
• Supervises the workforce in the car garage sales floor

Merchandise Manager

• Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Helps to ensure consistent quality of cars from different manufacturers are purchased and retailed in good price that will ensure we make good profit
• Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Manages the organization website
• Handles eCommerce aspect of the business
• Responsible for installing and maintenance of computer software and hardware for the organization
• Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
• Manages the organization’s CCTV
• Handles any other technological and IT related duties.

Accountant 

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries
• Responsible for cleaning and washing all the cars in the garage at all times
• Ensures that toiletries and supplies don’t run out of stock
• Handles any other duty as assigned by the garage manager

6. SWOT Analysis

Our major aim of starting just one outlet of our car dealership shop in Mumbai – Maharashtra is to test run the business for a period of 7 years to know if we will invest more money, expand the business and then open other outlets in India.

We are quite aware that there are several car dealership garages all over Mumbai – Maharashtra and even in the same location where we have plans to open ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.

Raj Ravi Khan® Car Dealership, Inc. employed the services of an expert HR and Business Analyst with bias in car dealerships to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.

This is the summary of the SWOT analysis that was conducted for Raj Ravi Khan® Car Dealership, Inc.;

Our business location, the business model we will be operating, varieties of payment options, wide range of both brand new and used cars from different manufacturing brands and our excellent customer service culture will definitely count as a strong strength for Raj Ravi Khan® Car Dealership, Inc.

From our findings, one major weakness that may work against us is the fact that we are a new car dealership garage in Mumbai – Maharashtra and we don’t have the financial capacity to compete with multi – million car garages that can afford to purchase fleets of cars in one fell swoop.

• Opportunities:

A population of over 1.3 billion people and a growing population of the middle class in India provide us with unlimited opportunities to sell our cars to a large number of individuals and corporate organizations. We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our car garage; we are well positioned to take on the opportunities that will come our way.

Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power. Another threat that may likely confront us is the arrival of a new car dealership outlet in same location where ours is located. So also, unfavorable government policies may also pose a threat to businesses such as ours.

7. MARKET ANALYSIS

• Market Trends

The trend in India shows that the auto industry is set to witness major changes in the form of electric vehicles (EVs), shared mobility, Bharat Stage-VI emission and safety norms amongst other.

Electric cars in India are expected to get new green number plates and may also get free parking for three years along with toll waivers. India’s electric vehicle (EV) sales increased 37.5 per cent to 22,000 units during FY 2015-16 and are projected to rise further on the back of cheaper energy storage costs and the Government of India’s vision to see six million electric and hybrid vehicles in India in the nearest future.

If you have ever taken your time to study car patronage and usage in India, you will have noticed that Indians especially the middle class make use of cars that are manufactured in India. This goes to show that there is a thriving business for car manufacturers in India.

One notable trend in the car dealership industry is that most car dealers are leveraging on online stores to sell their used cars to a large market.

The used car dealership garage landscape has seen tremendous changes in the last 20 years; it has grown from smaller outlets to a more organized and far reaching venture. The introduction of franchise and online car dealership makes it easier for a car dealership garage to reach out to a larger market far beyond the areas where their physical store is located.

8. Our Target Market

Those who purchase cars cut across all genders above 18 years; hence the target market for car dealership business is all encompassing. In essence, your target market can’t be restricted to just a group of people, but all those who desire to own a car.

In view of that, we have positioned our car dealership garage to service the residents of Mumbai – Maharashtra and every other location where outlets of our car dealership garage will be located. We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us.

We are in business to retail a wide range of cars to the following groups of people and corporate organizations;

• Middle Class Families
• Upper Class Families
• Corporate Organizations
• Celebrities
• Corporate Executives

Our Competitive Advantage

A close study of the global car dealership industry reveals that the market has become much more intensely competitive over the last decade especially with the advent of online car dealership stores. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.

We are aware of the competition and we are prepared to compete favorably with other leading car dealership garages in Mumbai – Maharashtra and throughout major cities in India.

Raj Ravi Khan® Car Dealership, Inc. is launching a standard car dealership garage that will indeed become the preferred choice for people who live and work in Mumbai – Maharashtra and every other location where our outlets will be opened.

Our car dealership garage is located in one of the busiest business districts in the city center in Mumbai – Maharashtra. We will ensure that we have a wide range of cars brands from leading manufacturers both in India and abroad in our garage at all times. It will be difficult for customers to visit our garage and not see the type of car they are looking for.

One of our business goals is to make Raj Ravi Khan® Car Dealership, Inc. a one stop car dealership shop. Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Raj Ravi Khan® Car Dealership, Inc. is in business to retail a wide range of both brand new and used cars to people in Mumbai – Maharashtra and every other location where we intend opening our outlets. Our source of income will be the retailing of a wide range of cars from different car manufacturing brands at affordable prices.

10. Sales Forecast

One thing is certain when it comes to car dealership business, if your garage has various brands of new and used cars from different manufacturing brands and is centrally positioned, you will always attract customers that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in and around Mumbai – Maharashtra and we are quite optimistic that we will meet our set target of generating enough profits from our first six months of operation and grow the business and our clientele base.

We have been able to critically examine the car dealership industry in India, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Mumbai – India.

• First Fiscal Year: INRs. 8 Million
• Second Fiscal Year: INRs. 18 Million
• Third Fiscal Year: INRs. 26 Million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor within our market space. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Raj Ravi Khan® Car Dealership, Inc. we conducted thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for people and organizations in and around Mumbai – Maharashtra and every location where we intend opening our outlets.

We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.

We hired experts who have good understanding of the car dealership industry in India to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Mumbai – Maharashtra, India.

In summary, Raj Ravi Khan® Car Dealership, Inc. will adopt the following sales and marketing approach to win customers over;

• Open our car dealership garage in a grand style with a party for all to attract people who live around our car dealership garage
• Introduce our car dealership garage by sending introductory letters alongside our brochure to households, corporate organizations, businesses and other key stakeholders in and around Mumbai – Maharashtra
• Ensure that we have a wide range of both brand new and used cars from different brands at all times.
• Make use of attractive hand bills to create awareness and also to give direction to our garage
• Position our signage/flexi banners at strategic places around Mumbai – Maharashtra, India
• Position our greeters to welcome and direct potential customers
• Create a loyalty plan that will enable us reward our regular customers
• Engage in roadshows within our neighborhood to create awareness for our car garage
• List our business and products on yellow pages’ ads (local directories)
• Leverage on the internet to promote our business
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

In spite of the fact that our car dealership garage is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our car dealership garage. Raj Ravi Khan® Car Dealership, Inc. has a long-term plan of opening our car garages in various locations all around key cities in India which is why we will deliberately build our brand to be well accepted in Mumbai – Maharashtra before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Raj Ravi Khan® Car Dealership, Inc.;

• Place adverts on community based auto newspapers, radio and TV stations.
• Encourage the use of word of mouth publicity from our loyal customers
• Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.
• Ensure that our we position our banners and billboards in strategic positions all around Mumbai – Maharashtra
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Advertise our cars dealership business in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and trucks and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals.

12. Our Pricing Strategy

We are aware of the pricing trend in the car dealership industry which is why we have decided to build robust business relationship with car manufacturers in India so as to enable us get cars at good prices and also sell at good prices.

In view of that, our prices will conform to what is obtainable in the industry but will ensure that within the first 6 to 12 months our cars are sold a little bit below the average price of various car brands in India. We have put in place business strategies that will help us run on low profit for a period of 6 months; it is a way of encouraging people to buy into our car dealership brand.

We know we don’t have the capacity to compete with big players in the car dealership industry but we will ensure that the prices and quality of all the cars that are available in our garage are competitive with what is obtainable amongst car garages within our level.

• Payment Options

The payment policy adopted by Raj Ravi Khan® Car Dealership, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of India.

Here are the payment options that Raj Ravi Khan® Car Dealership, Inc. will make available to her clients;

• Payment via bank transfer
• Payment via credit cards / Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our clients make payment for our cars without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our cars.

13. Startup Expenditure (Budget)

From our market survey and feasibility studies, we have been able to come up with a detailed budget on achieving our aim of establishing a standard and highly competitive car dealership business in Mumbai – Maharashtra, India and here are the key areas where we will spend our startup capital;

• The total fee for registering the business in India – INRs. 9,200
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – INRs. 15,700.
• Marketing promotion expenses for the grand opening of Raj Ravi Khan® Car Dealership, Inc. in the amount of INRs. 13,000 and as well as flyer printing (2,000 flyers at INRs. 1.00 per copy) for the total amount of INRs. 8,980.
• The cost for hiring business consultant – INRs. 4,000
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – INRs. 15,000
• The cost for payment of rent for 12 months at INRs. 6.00 per square feet in the total amount of INRs. 200,000
• The cost for garage remodeling – INRs. 50,000.
• Other start-up expenses including stationery (INRs. 3,000) and phone and utility deposits ( INRs. 11,000 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – INRs. 260,000
• The cost for start-up inventory (stocking with a wide range of brand new and used cars from different manufacturing brands) – INRs. 12 Million
• The cost for store equipment (cash register, security, ventilation, signage) – INRs. 23,750
• The cost of purchase and installation of CCTVs: INRs. 10,000
• The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): INRs. 50,000.
• The cost of launching a website: INRs. 7,000
• The cost for our opening party: INRs. 29,000
• Miscellaneous: INRs. 10,000

We would need an estimate of INRs. 12.5 million to successfully set up our standard car dealership garage in Mumbai – India.

Generating Startup Capital for Raj Ravi Khan® Car Dealership, Inc.

Raj Ravi Khan® Car Dealership, Inc. is a private registered business that is solely owned and financed by Raj Ravi Khan and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.

These are the areas we intend generating our startup capital;

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from the bank

N.B: We have been able to generate about INRs. 2.5 million (Personal savings INRs. 2 million and soft loan from family members INRs. 500,000 ) and we are at the final stages of obtaining a loan facility of INRs. 10 million from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Raj Ravi Khan® Car Dealership, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to retail our wide range of cars a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Raj Ravi Khan® Car Dealership, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of six years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the garage: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party planning: In Progress
• Compilation of list of cars available in our garage: Car Dealership Business Plan
• Establishing business relationships with manufacturers of cars in India and abroad, used car auction houses in India and abroad and other car dealership garages in and around Mumbai – Maharashtra, India: In Progress

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Building a Profitable Car Dealership Business from Scratch: A Step-by-Step Guide

• November 16, 2023
• Automotive Lead Generation

If you are passionate about cars and have a strong entrepreneurial spirit, starting your own car dealership business can be an exciting and lucrative venture. However, building a profitable car dealership business from scratch requires careful planning, market understanding , and a solid financial foundation. In this step-by-step guide, we will explore the key aspects of starting a car dealership business and provide valuable insights to help you succeed.

Understanding the Car Dealership Business

Starting a car dealership business requires a comprehensive understanding of the industry and its dynamics. The car dealership industry involves the buying and selling of new and used vehicles to consumers or other businesses. It encompasses various segments, such as passenger cars, commercial vehicles, and luxury automobiles.

As a car dealer, your primary goal is to acquire vehicles at wholesale prices and sell them at a profit. However, this is just the tip of the iceberg. To succeed in this competitive market, you will need to establish strong relationships with suppliers, manage your inventory effectively, negotiate prices, and provide exceptional customer service .

Let’s delve deeper into the key aspects of the car dealership business.

The Basics of the Car Dealership Industry

The car dealership industry is a complex and multifaceted sector that requires a deep understanding of market trends and consumer preferences. It is essential to keep up with the latest developments and technological advancements in the automotive industry to stay ahead of the competition.

When it comes to the types of vehicles you can sell, the possibilities are vast. From compact cars to SUVs, from electric vehicles to hybrid models, the choices are endless. Understanding the different vehicle segments and their unique characteristics will help you cater to a wide range of customer preferences.

Moreover, the car dealership business is not limited to just selling vehicles. Many dealerships offer additional services such as maintenance and repairs, financing options, and extended warranties. These value-added services can significantly enhance customer satisfaction and loyalty.

Key Players in the Car Dealership Market

To navigate the car dealership market successfully, it is crucial to be aware of the key players in the industry. Understanding their roles and characteristics will help you identify opportunities and develop a competitive edge.

Franchise Dealerships are one of the major players in the market. These dealerships have exclusive rights to sell new vehicles from a specific brand or manufacturer. They often offer additional services like maintenance and repairs, making them a one-stop-shop for customers.

Independent Dealerships, on the other hand, are not affiliated with any particular brand. They typically specialize in selling used vehicles and have more flexibility in terms of inventory selection and pricing. This flexibility allows them to cater to a broader range of customer budgets and preferences.

In recent years, online car marketplaces have gained significant popularity. These platforms connect buyers and sellers, facilitating transactions and providing extensive vehicle listings. Online car marketplaces offer convenience and a vast selection of vehicles, making them a preferred choice for many customers.

By understanding the strengths and weaknesses of these key players, you can position your dealership strategically and differentiate yourself from the competition.

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Profitability Factors in the Car Dealership Business

While the car dealership business can be profitable, several factors contribute to your success. It is essential to consider these factors and implement effective strategies to maximize profitability .

Market Demand plays a crucial role in determining the success of your dealership. Assess the demand for vehicles in your target market. Are there specific vehicle types or brands that are highly sought after? Understanding market trends and consumer preferences will help you make informed decisions regarding your inventory selection.

Location is another critical factor. Choose a strategic location that ensures visibility, accessibility, and proximity to potential customers. A well-chosen location can significantly impact foot traffic and customer reach.

Pricing Strategy is a delicate balance. Set competitive prices that attract buyers while still allowing for a reasonable profit margin. Conduct market research and analyze your competitors’ pricing strategies to determine the optimal pricing for your vehicles.

Effective Inventory Management is essential to minimize holding costs and maximize turnover rate. Keep track of your inventory, analyze sales data, and adjust your purchasing decisions accordingly. Maintaining a diverse inventory that caters to different customer preferences can also help attract a wider customer base.

Customer Experience is a key differentiator in the car dealership business. Provide exceptional customer service and build long-term relationships with buyers. A satisfied customer is more likely to become a repeat customer and refer your dealership to others.

By considering these factors and implementing effective strategies, you can increase the profitability of your car dealership business. Remember, success in this industry requires continuous adaptation to changing market dynamics and a relentless focus on customer satisfaction.

Planning Your Car Dealership Business

Identifying your target market.

It is essential to identify your target market before launching your car dealership business. Consider factors such as demographics, income levels, preferences, and local competition. By understanding your target market’s needs and preferences, you can tailor your inventory and marketing efforts to attract the right customers.

Moreover, conducting market research will help you identify trends, predict demand, and adjust your business strategy accordingly.

Choosing the Right Location

The location of your car dealership can significantly impact your success. Look for areas with high foot traffic, easy access, and visibility. Consider the proximity to major roads, commercial hubs, and residential neighborhoods.

Additionally, check local zoning laws and regulations to ensure that your chosen location allows for car dealership activities. Consult with a real estate professional to find the best-fit location for your business.

Deciding on New or Used Cars

Another critical decision is whether to focus on selling new or used cars . Both options have their advantages, and your choice will depend on factors like market demand, available resources, and competition in your area.

Selling new cars might require establishing partnerships with specific manufacturers, meeting certain sales quotas, and complying with brand guidelines. On the other hand, selling used cars allows for more flexibility in terms of pricing, selection, and sourcing.

Legal Considerations for Car Dealerships

Necessary licenses and permits.

Before opening your car dealership, you must obtain the necessary licenses and permits to operate legally. Consult with your local licensing agency or business regulatory authority to identify the specific requirements for your area.

Common licenses and permits typically include a dealer license, salesperson license, and potentially additional permits for vehicle storage, display, and vehicle registration.

Understanding Zoning Laws

Car dealerships are subject to zoning laws, which regulate the types of activities that can take place in specific areas. Ensure that your chosen location is zoned for car dealership activities or obtain the necessary permits or variances.

Consult with a legal professional or local zoning authorities to navigate the zoning regulations and avoid any potential issues.

Insurance Requirements for Car Dealerships

Obtaining comprehensive insurance coverage is crucial to protect your car dealership business from potential risks and liabilities. Insurance requirements may vary depending on your location and the type of vehicles you sell.

Common insurance policies for car dealerships include general liability insurance, inventory insurance, garage liability insurance, and workers’ compensation insurance. Consult with an insurance professional to design an insurance package that suits your specific needs.

Financing Your Car Dealership Business

Startup costs for a car dealership.

Starting a car dealership requires a significant upfront investment to cover various expenses. These may include:

• Property or lease costs for your dealership location.
• Initial inventory purchase.
• Licensing and permit fees.
• Office equipment, furniture, and signage.
• Marketing and advertising expenses.
• Insurance premiums.

Ensure you have a detailed business plan and secure adequate funding to cover these startup costs and sustain your business until it becomes profitable.

Securing Financing for Your Business

If you don’t have the necessary capital to finance your car dealership business, securing financing options can be a viable solution. Explore traditional banking options, government-backed loans, or private investors who specialize in financing car dealership startups.

Prepare a comprehensive business plan, financial projections, and supporting documents to increase your chances of obtaining financing. Demonstrate your knowledge of the industry, market analysis, and strategies for profitability to instill confidence in potential lenders or investors.

Managing Cash Flow in the Car Dealership Business

Effective cash flow management is vital in the car dealership business to ensure ongoing operations and sustained growth. Some key practices include:

• Implementing a robust accounting system to track revenue, expenses, and inventory.
• Regularly reviewing financial statements to identify trends, bottlenecks, and areas for improvement.
• Establishing relationships with reliable suppliers and negotiating favorable terms.
• Minimizing holding costs by optimizing inventory turnover.
• Being diligent with expenses and prioritizing cost control measures.

By continuously monitoring and managing your cash flow, you can navigate potential challenges and position your car dealership for long-term profitability.

Starting a profitable car dealership business from scratch requires careful planning, market understanding, and financial preparedness. By following this step-by-step guide, you can make informed decisions, overcome challenges, and build a successful car dealership enterprise. Remember to continuously adapt to market trends, provide exceptional customer service, and prioritize profitability to thrive in the competitive car dealership industry.

Want to improve your sales and move cars off the lot faster? Book a test drive with AutoRaptor to see how our simple dealership CRM software can help you close more deals effectively.

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Tata Capital > Blog > Loan for Business > How To Start A Dealership Business In India & How To Become A Dealer?

How to start a dealership business in india & how to become a dealer.

The plethora of government initiatives in the last few years has seen dealerships growing in leaps and bounds in India. Usually considered a challenging space to make a mark for new entrants, dealerships today are among the easiest initiatives for individuals and groups alike. Are you interested in starting a dealership business in India? If so, this blog is for you! 

In this article, we'll outline the steps necessary to start and run a dealership business in India and provide insights on how to become a dealer. So whether you're considering expanding your business into unfamiliar territory or are already planning to open up a dealership, read on to learn more!

An introduction to the dealership business

The items you see at your local market or get delivered online usually reach you via suppliers and distributors. Other than some D2C brands, India follows a hierarchy system for most businesses which involves multiple points of contact between a manufacturer and an end customer. 

These products pass the supply chain, where the manufacturer sends the products to a supplier, also known as a dealer. These dealers pass on the goods received to the distributors, responsible for sending them to the retailers and ultimately to the consumers. 

Anyone can open a dealership and sell any product they are authorized to deal in. 

Steps to start a dealership business

If you're thinking of starting a dealership business in India, here are some essential steps that you need to follow -

Make a business strategy for your dealership

It is crucial to develop a business strategy for your dealership if you want it to be successful. First, it is necessary to identify the goals to achieve. Once that's done, work out a plan of action based on your research and understanding of the local market conditions. Many types of businesses and products are available in today's marketplace - so make sure that the type of dealership you choose sticks out from the rest! 

And don't forget about profitability! A well-run dealership shouldn't just focus on making money; it should also enjoy its sense of purpose and contribute positively to society.

Dealership Agreement

When starting a dealership, it is essential to have an agreement in place between you and the business owner. This document sets out the terms and conditions under which you will operate your business. 

Some of the most important things to include are: - 

• The dealership name and location 
• The products and services offered
• The compensation scheme for sales personnel
• Dealer perks such as training facilities or discount schemes 

Ensure all these details are spelled out before signing on the dotted line! Once everything is agreed upon, create a basic business plan outlining how you envisage running your dealership. 

Ensure all licenses and permits required by law are in place before moving forward. Finally, initiate the recruitment process and get started!

Determine your supplier

Before getting started, it is vital to have a clear idea of what you want and where your dealership is headed. You also need the right team of suppliers in place, all of whom should be well-versed with the latest laws and regulations related to the industry.

A pro tip - connect with local suppliers to reduce delivery issues and maintain the margins. 

Build the business

When starting a dealership business, it is important to have a well-thought-out plan. It will include developing a business plan and preparing financial estimates. Once you have those pieces of the puzzle in place, it's time to advertise your dealership and build relationships with potential customers. 

The first step might be identifying your target market - this will help you figure out areas that deserve more attention and focus marketing efforts towards them.

Do not forget to track results and measure the success of your campaigns so that you can continue improving upon what works best for your dealership.

Contact a Franchisor

If it is too difficult for you to start a business, you can take the franchise route, where you opt to manage a franchise of an existing, reputable brand.

There are a few things you need to do before approaching a franchisor:

• Ensure your dealership is up-to-date and you understand the latest trends and technology.
• Have an effective business plan.
• Be aware of the various regulations that apply. 

After the groundwork has been done, it's time to find a reputable and qualified franchisee who will help turn your dream into reality. 

Do some research beforehand so you know which franchises are best suited for your business profile and location. Then, once you've found someone good, approach them!

Create a Powerful Network

Trade shows and events are a great way to connect with other dealers in your industry and get leads for your business. By networking with others, you can find out what new products or services are available on the market and potential partners or distributors. 

Use social media platforms, like LinkedIn and Facebook, to stay connected with other dealers in your industry. It is vital to track down older dealership websites archived, so you don't miss any opportunities. For this, you can connect with experienced professionals or look for what your competition is up to.

Establish a Purchase Policy

It is important to have a clear purchase policy in place, so customers know what they are getting and that the dealer is confident in selling the product. It should be unambiguous and easy to follow and should have clear payment terms, rejection terms, and more.

Dealers must also ensure their inventory matches customer demand, avoiding any disputes or misunderstandings down the line. A well-defined purchase policy will help dealers establish trust with potential buyers and create positive relationships. It would result in increased sales for both parties!

Keep an eye on how your company is doing

It is important to keep an eye on the health of your business. By taking the time to track various indicators, you can identify any problems and take corrective measures before they become big issues. These indicators include operating inventory turnover rate, COGS (cost of goods sold, payroll churn, and more.

How to Become a Dealer in India?

Starting and running a dealership business in India can be a lucrative and challenging venture. However, it's possible if you're determined and have the right skills and resources. 

The first step is to be persistent and work hard at building your business. You'll need to have a saleable product, excellent customer service, and an efficient marketing strategy. 

Make sure you have a solid business plan and are well organized, as dealerships in India are complex and require a lot of up-front work. 

Do not let financing be a roadblock. Contact Tata Capital Business Loans Today

In this blog, we have covered everything you need to know about starting and running a dealership business in India. From the basics of starting a business to the intricacies of becoming a dealer, we have covered it all. 

So what are you waiting for? Start your business journey today and become a successful dealership owner in India! You can get in touch with Tata Capital Business Loans to help get the requisite funds to start your dealership business ASAP.

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Table of Content

Importance of dealership businesses in india, benefits and challenges of becoming a dealer, best dealership business ideas in india, how can a business loan help to become a dealer, how to apply for business loans, to conclude, frequently asked questions about dealership business.

A dealership business in India can be a rewarding venture for aspiring entrepreneurs. With a diverse and growing market, dealerships play a crucial role in connecting manufacturers with customers across various industries. This blog provides a step-by-step guide on how to become a dealer and importance of a dealership business in India.

The following are the dealership businesses in India:

• Employment Generation

Dealership businesses play a significant role in creating employment opportunities across the country. They provide jobs not only in sales but also in service centres, logistics, administration, and other support functions.

• Distribution and Market Reach

Dealerships act as a crucial link between manufacturers and consumers, facilitating the distribution of products to various regions. They ensure products are readily available, provide localised support, and enhance the market reach of manufacturers.

• Product and Brand Awareness

Dealerships contribute to building product and brand awareness among consumers. Through marketing and promotional activities, they showcase product features, and benefits, and educate customers about the brand, creating a positive impression.

• After-Sales Service and Support

Dealerships play a vital role in providing after-sales service, warranty support, and maintenance for products. They ensure customer satisfaction, build trust, and enhance the overall ownership experience.

• Understanding the Dealership Business Model

To embark on a successful dealership business, it is essential to grasp the intricacies of the dealership business model. This model typically involves partnering with a manufacturer or brand to sell their products directly to customers. As a dealer, you act as a link between the manufacturer and the end consumer, responsible for marketing, sales, and service operations.

• Researching and Selecting the Right Industry

Before diving into the dealership business, thorough research is vital to identify the right industry or sector. Assessing market trends, customer preferences, and the competitive landscape can help you make informed decisions. Consider factors such as demand, growth potential, profitability, and the reputation of the brand you wish to associate with. Conducting market surveys, analysing market reports, and consulting industry experts can aid in selecting the right industry for your dealership business.

• Understanding Legal and Financial Aspects

Establishing a dealership business involves complying with various legal and financial aspects. Firstly, you need to register your business entity, such as a sole proprietorship, partnership, or private limited company, with the appropriate authorities. It is crucial to obtain the necessary licences and permits, including the dealership agreement with the manufacturer. It is advisable to create a detailed business plan and explore financing options such as Business Loan , which can provide the necessary funds to kick-start your dealership business.

ALSO READ :- How to Use Your First Business Loan Effectively?

The pros of becoming a dealer are as follows:

• Profit Potential

Dealers can earn profits by purchasing goods from manufacturers and supplying them to retailers, capitalising on the low investment requirements and potential product demand.

• Brand Association

Exclusive dealership of preferred brands allows for established brand associations, potentially offering additional margins.

• Business Operation Flexibility

Dealers enjoy flexibility as they are not involved in the production and manufacturing processes. Purchasing finished products provides convenience in business operations. The cons of becoming a dealer are as follows:

• Initial Investment

While the initial investment for a dealership is not substantial, funds are still required for hiring staff, setting up an office, and paying manufacturers before receiving payments from retailers or corporate customers.

• Market Competition 

Increased competition in the market, fueled by the low investment and high-profit margin nature of dealerships, requires maintaining competitive quotes to attract and retain business.

• Inventory Management

Dealers need to balance demand and supply, staying in touch with retailers to monitor market trends and inform manufacturers about upcoming demand. This involves effective inventory management.

Here is a list of the best dealership business ideas in India:

• Computer hardware and accessories
• Automobile 
• Organic Food
• Arts and crafts
• Sports equipment
• Furniture and interior decor items
• Plastic items

To become a dealer in India, you require an initial investment for various expenses like staffing, marketing, inventory management, office setup, market research, and addressing working capital needs.  A Business Loan offers a solution by covering these expenses without usage restrictions, allowing you to focus on becoming a dealer without financial concerns. Poonawalla Fincorp provides you with a Business Loan at competitive interest rates , offering loan amounts up to Rs. 50 Lakh and flexible repayment tenures extending up to 48 months.

Follow the steps to apply for a Business Loan with Poonawalla Fincorp to start your dealership business

• Step 1: Click on ‘Apply Now’ and open the application form.
• Step 2: Provide your contact information and other required details in the form.
• Step 3: Upload the necessary documents and click on the ‘Submit’ button.

A dealership business in India requires careful planning, industry knowledge, and financial support. Poonawalla Fincorp, a trusted financial institution, offers business loans tailored to meet the specific requirements of entrepreneurs like you. Whether you need capital for infrastructure, inventory, or working capital , Poonawalla Fincorp can provide the necessary financial assistance to fuel the growth of your dealership business.

1.    Which dealership is most profitable in India? The profitability of a dealership in India can vary depending on several factors, such as the industry, location, brand, and market demand. Generally, automobile dealerships tend to be highly profitable due to the consistent demand for vehicles.

2.    Which distributorship is best in India? Determining the best distributorship in India depends on your interests, market dynamics, and personal goals. There are various sectors with promising distributorship opportunities, such as FMCG (Fast-Moving Consumer Goods), pharmaceuticals, electronics, and food and beverages.

3.    Which is better a franchise or a dealership? The choice between a franchise and a dealership depends on several factors, including the industry, investment capabilities, and personal preferences.

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Business Loan disbursal is at the sole discretion of Poonawalla Fincorp. *Terms and Conditions apply

Poonawalla Fincorp Team

Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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1. What do the initial startup and ongoing car dealership cost in India?

Due to the numerous clauses and restrictions, starting a car dealership franchise or business in India may seem difficult. The minimum car dealership cost in India is INR 60 lakhs, therefore, make sure you have the necessary budget to start this business. 

While the documentation process is lengthy, you will need to obtain certain documents to establish a foothold in this market, such as a surety bond, company experience, and correct licensure.  The registration of a surety bond with the local state’s DMV is the first step in starting your business as an auto dealer. The dealer is then able to qualify for an auto dealer licence. This licence will be necessary to sell autos in that state.

Following the acquisition of a licence, the next stage is to purchase bonds. A surety bond is frequently referred to as insurance because it protects clients and the state from such dealers’ fraud. Some forms of bonds about which you should be aware and have access are listed below. These ties are essential to the successful operation of your organisation: 

• Wholesale car dealer bonds
• Used car dealer bonds
• Motorcycle dealer bonds

2. Steps to take after you’ve obtained the bonds you require:

Obtaining a premium bond plan depends entirely on your banking skills, making it challenging for dealers to calculate the actual costs of starting a business. Surety bonds are frequently reliant on the following factors: 

• The amount of the bond required.
• Your financial assets and credentials are at risk.
• If you prefer to finance the premiums, there will be additional expenses.
• Your credit rating.

Dealers must obtain their licence in addition to receiving a bond. The types of licences you may require are determined by the state and area you intend to conduct business.

The following is a list of licence categories as defined by most states:

• New car dealer
• Reconditioner licensing
• Used car dealer (retailers)
• Rebuilder licensing
• Wholesaler licensing

3. The standard approach for entering the vehicle dealership business is as follows:

• Completing the application form
• The process of obtaining a surety bond.
• Purchase automobile liability insurance.
• Obtain a Goods and Services Tax identification number or GSTIN.
• Establish your car dealership business in a prominent location.
• Ensure that your dealership’s pictures and business signs are compliant with state-specific photo and signage requirements by regulating them with the location.
• Pay the fees that are required.
• The courthouse will issue you a dealer’s tag.
• To sell cars, you’ll need a sales licence.

4. Who should I sell cars to with my auto dealership?

Using both physical and online ads to bring people to your auto dealership is one of the most effective ways to advertise your car dealership business. While marketing accounts for a substantial portion of your revenue, referrals are equally crucial to the success of your auto dealership.

When it comes to attracting clients to your dealership, you should start with those that have strong credit. Because your company deals with automobiles, you should be aware that most of them will require a sound financing option, which will necessitate a solid credit score. While the majority of dealers have a difficult time locating clients with strong credit, certain dealerships specialise in financing those with bad credit.

Also Read:  What are the 6 Profitable Dealership Business Ideas in India?

5. What are the ways that a car dealership makes money?

Dealers make their money by selling vehicles at a higher price than their actual price and do regular maintenance on the cars it sells. Customers often pay commissions on automobiles they buy (which are included in the overall sales cost of the vehicle) and hourly or fixed maintenance costs. You can look at examples  of Kia dealership in India or Mahindra franchise cost for familiarizing  yourself with all aspects of this business.

6. What would be a reasonable fee for customers?

To understand this, you must first comprehend the profit model of a vehicle dealership. A company’s revenue and profits are generated by selling vehicles at a higher price than the owner’s invoice price. The other way they make money through this automobile dealership opportunity is by servicing the cars they sell.

When it comes to charging the correct price, dealers are typically allowed to sell their goods at the manufacturer’s suggested retail price (MSRP). They do, however, have the right to provide varied discounts to their clients. If the dealer wants to sell their vehicles for less than the dealer list price, they can do so.

7. What is the maximum profit a vehicle dealership can make?

Profit, like dealer operating costs, is entirely dependent on wholesale prices and inventory costs, charges for insurance and bonds, and other expenses. A dealer can generally profit between 2% and 3% of the car’s listed price or invoice price.

8. How can you increase the profitability of your company?

It’s not easy to make a car dealership  profitable. Since there are so many policies and rules controlling the sale of automobiles, most dealerships rely on customer service to help them flourish in the future. Therefore, excellent customer service can boost a dealer’s chances of generating more money. A Honda dealership, for example, may earn more than a typically used car dealership . Luxury dealers can generate more money than dealers who sell mid-to low-end brands.

Step 2: Establish A Legal Entity

The most popular business structures are sole ownership, partnership, limited liability company (LLC), and franchise.

If your vehicle dealership is issued, becoming a corporate legal body, including an LLC or corporation, prevents you from holding personally accountable. You can form an LLC on your own and pay only the state’s modest fees, or you can employ one of the best LLC Services for a nominal fee.

Step 3: File Your Taxes

Before you can start doing business, you’ll need to register for several state and central taxes. If you don’t have your Permanent Account Number or PAN, you need to do so and adhere to Goods and Services Tax or GST compliance.

Step 4: Establish a Corporate Bank Account and a Credit Card

Personal asset protection necessitates the use of separate business banking and credit accounts. When your personal and corporate funds are intermingled, your assets (such as your home, car, and other possessions) are put in danger if your company is sued. This is referred to as piercing your corporation veil in business law. 

Furthermore, learning how to develop company credit can help you obtain credit cards and other funding in your business’s name (rather than your own), lower interest rates, and increase credit lines, among other benefits.

• Open a bank account for your business

This keeps your financial property separate from your firm’s assets, which is vital for personal portfolio investments. It also simplifies accounting and tax preparation.

• Get a credit card for your business

By keeping all of your company spendings in one location, you can easily distinguish between personal and business expenses. It also establishes your company’s credit history, which can help you raise funds and attract investment in the future.

Step 5: Create a Business Accounting System

Understanding your business’s financial performance requires keeping track of your numerous expenses and sources of money. Maintaining precise and complete records also makes annual tax filing much easier. For a small car dealership business, you can use an accounting app like  Legal Tree  to develop business reports, remind vendors or customers for payments and always stay on track. 

Step 6: Get the Permits and Licenses You Need

Failure to get required permissions or licences can result in significant fines or possibly the closure of your firm. Therefore, learn about the requirements for State and Local Business licensing. In most states, obtaining a dealer’s licence is required. The application process for this licence varies by state.

Step 7: Obtain Commercial Insurance

Insurance, like licences and permits, is required for your company to thrive safely and legally. In the case of a covered loss, commercial insurance can protect your corporation’s economic well-being.

Step 8: Create a Brand for Yourself

Your company’s brand is what it stands for, as well as how the general public perceives it. A strong brand will make your company stand out from the competition.

1. How do you sell and promote a car dealership?

It can be challenging to attract new clients. For selling or promoting your car dealership business, you can hold a tent sale. It is a special sale held off-site (away from the main business location) to attract new clients. Tent sales are governed by distinct rules and regulations in each state and county. For example, in some jurisdictions, you will be required to notify local authorities and charge for a licence to host the sale.

2. What can you do to keep your consumers coming back?

Relationships are the lifeblood of auto businesses. Because many of your clients are repeat customers, referral business and customer retention through exceptional customer service are critical. To attract new consumers, offer additional incentives such as special dealer financing or dealership perks (special service deals). Some dealers go above and beyond to deliver a one-of-a-kind customer experience. A dealer, for example, might set up a “play area” for kids and provide daycare services while parents buy.

Step 9: Make a Website for Your Company

The next stage is to construct a website for your car showroom in India  after you’ve defined your brand and designed your logo.

While developing a website is an important step, some people may believe it is out of their grasp due to a lack of website-building skills. In the last few years, web technology has advanced dramatically, making the lives of small business people considerably easier.

Also Read:  How to start your own Consultancy Firm in India?

Step 10: Set Up Your Mobile System for Your Business

Getting a business cellphone is one of the most effective strategies to keep your personal and professional lives distinct and confidential. That isn’t the only advantage; it also aids in your organisation’s automation, provides respectability to your company, and makes it a lot easier for potential consumers to locate and contact you.

The vehicle sector has had tremendous expansion in recent years, and this trend is projected to continue. This car dealership business is ideal for people who are passionate about cars and have excellent business acumen. So, if suitable steps are taken, and the above-mentioned vital factors are followed before beginning a business venture, the car showroom in India  will grow to great heights and last for many generations. For more business tips, download the  Legal Tree  app today.

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Car Dealership Business Plan: Complete Guide

• January 11, 2023

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your car dealership, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in your car dealership business plan. Use this template to create a complete, clear and solid business plan that get you funded.

1. Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors may lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire business plan below.

Why do you need a business plan for your car dealership?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or a private grant

How to write an executive summary for your car dealership?

Provide a precise and high-level summary of every section that you have included in the business plan. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately. Also make sure that the executive summary doesn’t exceed 2 pages.

The executive summary usually consists of the 5 main paragraphs:

• Business overview : introduce your car dealership: what is your business model (franchise vs. independent business ; new vs. used car dealership), how many cars will you have in inventory? Are you partnering with any car manufacturer(s)? Where would your store be located? Etc.
• Market overview : briefly analyze the car dealership industry in your area ( market size and growth), your competitors and target customers: average income of your target audience , demographic distribution, customer preferences etc.
• Management & people : introduce the management team and their industry experience. Mention your business partner(s), if any. Also give here an overview of the different teams, roles and their reporting lines
• Financial plan : how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? Also include here a small chart with your key financials (revenue, net profit )
• Funding ask : what loan/investment/grant are you seeking? How much do you need? How long will this last? How will you spend the money?

Car Dealership Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Business Overview

In the business overview section of your car dealership business plan, you should expand on what your company sells, to whom, and how it is structured. A few examples of questions you must answer here are:

• The history behind the project: why did you choose to open a car dealership today?
• Your business model : Are you franchising or is this an independent store? Are you selling new or used vehicles?
• Products & services : What vehicles / brands do you plan to sell? Are you planning to add any additional services (e.g. car repair & checkups, etc.)
• What is the legal structure of your company? Who are the directors / shareholders?

a) History of the Project

Briefly explain how did you come up with the plan to start a car dealership business. What motivated you to get into this business venture? 

Also try to demonstrate to investors your interest and passion for the car industry and car dealership in general.

For example, you might have worked in a car dealership and/or at a car manufacturer sales department in the past, and found immense growth potential for this type of business in your area.

b) Business Model

Explain in this section what business model you chose for your car dealership. Here are a few questions you must answer:

• Will you start an independent dealership, franchise model, chain store, etc.?
• Will you open a brand-specific dealership?
• Would your car dealership deal in new cars, used cars, or both?
• Do you plan to open an online dealership?
• Would you offer service and repairs in your car dealership?

c) Products & Services

Now that we have briefly introduced what your business model is, you must explain in detail what exactly you intend to sell. There are 2 things here:

• Products (cars): what vehicles and brands do you intend to sell? Why did you choose these vehicles / brands?
• Services : if you offer additional services (e.g. car repairs, checkups), explain what they are

In addition to the products and services , you should also include a list of prices for each. Of course, this doesn’t need to be exact. Car prices fluctuate based on various factors. Yet, you must be able to provide a range of prices for each category (e.g. sedan, luxury cars, vans, etc.).

If you specialize in a specific brand, you can provide a list of prices per model in appendix as well.

The prices are important as they will allow investors to tie your product offering with your financial projections later on.

d) Legal Structure

Explain the legal structure of your nursing home in this section. Are you starting a corporation, a limited liability company, or a partnership? Who are the investors? How much equity do they actually own? Is there a board of directors? Do they have prior industry experience?

3. Car Dealership Market Overview

A complete understanding of the car dealership industry is important for the success of your business.

Therefore, you must cover here 3 important areas:

• Status quo : how big is the car dealership industry in your area? How fast is the market growing? What are the trends fuelling this growth (or decline)?
• Competition overview : how many car dealership competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?
• Customer analysis : what are your target customers? What are their customer preferences?

a) Status quo

When looking at the car dealership industry, try to start at the national level (US) and narrow it down to your service area (a city for example). You should answer 2 important questions here:

How big is the car dealership industry in your area?

How fast is the car dealership industry growing in your area, how big is the car dealership industry in the us.

The auto parts and car dealership industry in the US is huge: it was worth $1.18 trillion in 2021 as per the National Automobile Dealers Association . As per the same report, there were 16,676 light vehicles car dealerships in the US in 2021 which generate an average revenue of $71 million.

Sales are divided between new (52%) and used vehicles (37%) as well as services and parts (11%).

After the US, assess the size of the car wash industry in your city or area. Focus on the zone where you plan to offer your services.

Naturally, you might not be able to get the data for your specific city or region. Instead, you can estimate the size of your market, for more information on how to do it, read our article on how to estimate TAM, SAM and SOM for your startup .

Luckily, NADA publishes statistics per state so you can narrow it down easily. For your city instead, you will need to do work out some estimates. To give you an example, let’s assume you plan to operate in an area where there are already 30 car dealership businesses (in a 25 miles radius for example).

Assuming our business is based in Connecticut, we can use the state’s average annual turnover of $49,661 : we can reasonably assume that the car dealership industry is worth $1.5 million in your area . In other words, there are over 35,100 light vehicles (new and used) being sold in your area each year (assuming the average retail price of $43,000).

Now that we know your area’s market size, let’s look at growth instead.

Fortunately, you can use NADA’s number again as they publish annual reports. Just use your state’s market size growth, and explain the growth (or decline). This can be due to average car prices, or volume.

b) Competition overview

You should discuss both your direct and indirect competition in your business plan. Other car dealerships in the region will be your immediate competitors. Internet auctions, individual dealers, etc., will be your indirect competitors. 

In this section, you should also discuss the essential components of the business models of your main competitors. Your research should be focused on their clientele, the kinds of cars they offer, and their strengths and weaknesses .

A thorough competitive analysis is crucial as it may allow you to discover and address a customer need or preference that none of your rivals is addressing today.

Here are some of the questions that you must answer in this section:

• How many competitors are there in the area where you want to open your car dealership?
• Are they franchises or independent stores?
• Do they partner with specific car manufacturers?
• What type of cars do they offer (luxury, economy, used, new, etc.)?
• What is the average price range of the cars they sell?
• How many employees do they have?
• Do they offer services and repairs?
• Do your competitors offer buyback on the cars sold by them previously to the client?
• What type of offers and discounts do they offer to attract customers?
• How many cars / vehicles do they sell on average per month?

c) Customer analysis

Now that we have a good idea of the car dealership industry in your area as well as competition, now is time to focus on your target audience: customers.

Knowing your customer is extremely important before you get into any business. This is all the more relevant for car dealership where customer preferences and tastes are very different.

For example, if you are planning to get into a luxury car dealership business, you should look into:

• The estimated population of high-income people in your area
• Types of luxury cars that are in demand (hatchback, sedan, SUV, etc.)
• Shopping preference of your target customers (online or offline)
• How frequently do they buy (or exchange) new cars?
• Is their buying decision influenced by offers or discounts?
• What features do your target customers want in their new luxury cars?
• What type of additional services do they expect from their dealers?

4. Sales & Marketing Strategy

This is the section of your business plan where you outline your customer acquisition strategy. Try to answer the following questions:

• What are the different marketing strategies you will use?
• What are your Unique Selling Points (USPs)? In other words, how do you differentiate from your competitors?
• How do you intend to track the success of your marketing strategy ?
• What is your CAC or customer acquisition cost?
• What is your marketing budget?

What marketing channels do car dealerships use?

A few marketing channels that car dealership businesses typically use are:

• Signage, billboards
• PPC ads, Facebook ads, etc.
• Print media
• Loyalty programs
• Online local listing (Google Business)
• Content marketing (share content like vehicle maintenance tips, safe driving tips, etc.) on platforms like blogs, social media, etc.
• Word of mouth, recommendations

You must have a fair and nearly accurate estimate of your marketing budget. Therefore, make sure to budget for marketing accordingly in your financial projections.

What are your Unique Selling Propositions (USPs)?

In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.

A few examples of USPs are:

• Products: you may be the exclusive distributor or a car make in your area for example
• Services : you may offer repairs and regular checkups for your customers
• Location : you store is closer to a busy road and/or to where your customers live

Your USPs will depend on your business model, competitor analysis, and target audience. Whatever your USPs are, it should appeal to your potential customers and attract them.

5. Management & People

You must address 2 things here:

• The management team and their experience/track record
• The organizational structure: the different team members and who reports to whom

Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your car dealership.

Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.

Organization Structure

Even if you haven’t already hired a VP of sales, sales managers, support staff and any other relevant staff members, you must provide a chart of the organizational structure outlining the different teams, roles and their reporting lines.

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your car dealership is an attractive investment.

There should be 3 sections to your financial plan section:

• Your historical financials (only if you already operate the business and have financial accounts to show)
• The startup costs of your project (if you plan to start a new car dealership, or purchase new inventory, expand your store, etc.)
• The 5-year financial projections

a) Historical Financials (if any)

In the scenario where you already have some historical financials (a few quarters or a few years), include them. A summary of your financial statements in the form of charts e.g. revenue, gross profit and net profit is enough, save the rest for the appendix.

If you don’t have any, don’t worry, most new businesses don’t have any historical financials and that’s ok. If so, jump to Startup Costs instead.

b) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For a car dealership, startup costs are all the expenses you incur before you open your shop and starting making sales. These expenses typically are:

• The lease deposit for the commercial space you rent (if you don’t buy it)
• The design and renovation of the existing facilities
• The inventory costs (the initial stock of vehicles you must buy to sell them at opening)

For example, let’s assume you want to buy 30 light vehicles as a start for inventory, and you take on a loan where you need to put down 15% upfront. Now, assuming these vehicles each cost $50,000 on average, this means you must put down $300,000 yourself. This comes in addition with any other startup cost mentioned above (lease deposit, renovation costs, etc.).

c) 5-Year Financial Projections

In addition to startup costs, you will now need to build a solid 5-year financial model as part of your business plan for your car dealership .

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 20%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of vehicles you sell over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing and the number of customers as a small change in these assumptions will have a big impact on your revenues.

7. Funding Ask

This is the last section of the business plan of your car dealership. Now that we have explained what type of vehicles your company sells to whom and at what price, but also what’s your marketing strategy, where you go and how you get there, this section must answer the following questions:

• How much funding do you need?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

If you raise debt:

• What percentage of the total funding the loan represents?
• What is the corresponding Debt Service Coverage Ratio ?

If you raise equity

• What percentage ownership are you selling as part of this funding round?
• What is the corresponding valuation of your business?

Use of Funds

Any business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment to acquire the cost for the inventory (the vehicles)? Or will it cover mostly the cost of buying the land and building the store?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our car dealership financial model template , you won’t have any issues answering these questions.

For the use of funds, we recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

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Privacy Overview

Car Dealership Business Plan Template

Written by Dave Lavinsky

Car Dealership Business Plan

You’ve come to the right place to create your Car Dealership business plan.

We have helped over 5,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Car Dealerships.

Below is a template to help you create each section of your Car Dealership business plan.

Executive Summary

Business overview.

Wilson Toyota, located in Albuquerque, New Mexico, is a brand-new Toyota dealership that sells, leases, and services new and used Toyota vehicles. Our dealership will feature all the models that Toyota makes, from budget models to hybrids. In addition to our large inventory, we also offer in-house financing and service and repairs for all Toyota owners. With our competitive prices and world-class customer service, we plan to be the #1 Toyota dealer in the Albuquerque area in the next five years.

Wilson Toyota is led by Dylan Wilson who has extensive sales experience, including selling used cars for a previous employer. His experience and knowledge make him the perfect candidate to run a Toyota franchise.

Product Offering

Wilson Toyota will maintain an inventory of new and used Toyota vehicles. We will sell all Toyota models, including hybrid and electric vehicles. Some of the models we plan to sell include:

Wilson Toyota will also have a service center to help Toyota owners with routine maintenance, repairs, recalls, and part replacements. Additionally, Wilson Toyota will offer financing and insurance options for customers with all credit scores. Customers will find financing options at Wilson Toyota that they will not find at other area dealerships.

Customer Focus

Wilson Toyota will primarily serve the residents in the Albuquerque area. The city is home to thousands of families, professionals, and businesses in need of vehicles. We will offer budget vehicles to those who only need a basic model as well as luxury vehicles to those who have the disposable income to purchase something high-end.

Management Team

Wilson Toyota is led by Dylan Wilson who has been in sales for 20 years. Dylan Wilson has sold products in numerous industries, with his most recent experience being at a competitor dealership. Dylan Wilson is a car aficionado. He knows everything about the most popular models and how to find the perfect vehicle for every customer. His experience and knowledge make him the perfect candidate to run a Toyota franchise.

While Dylan Wilson has never run a dealership himself, he has worked in the industry for years. As such Dylan Wilson has an in-depth knowledge of the dealerships industry, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

Success Factors

Wilson Toyota will be able to achieve success by offering the following competitive advantages:

• Location: Wilson Toyota’s location is near the center of town, giving us access to thousands of residents, local office workers, and passersby shopping in the city.
• Great service at an affordable price: The complete array of auto services offered by Wilson Toyota is comprehensive, and Wilson Toyota will offer these services at a much more affordable price.
• Management: Our management team has years of business and marketing experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.
• Relationships: Having lived in the community for 25 years, Dylan Wilson knows all of the local leaders, newspapers and other influencers. As such, it will be relatively easy for Wilson Toyota to build brand awareness and an initial customer base.

Financial Highlights

Wilson Toyota is currently seeking $10 million to launch. Specifically, these funds will be used as follows:

• Lot design/build: $100,000
• Franchise fee: $400,000
• Inventory: $9 million
• Office equipment, supplies, and materials: $50,000
• Three months of overhead expenses (payroll, rent, utilities): $250,000
• Marketing costs: $100,000
• Working capital: $100,000

Company Overview

Who is wilson toyota, wilson toyota’s history.

Dylan Wilson incorporated Wilson Toyota as an S-Corporation in February 2023. The business is currently being run out of Dylan’s private office, but once the build-out on Wilson Toyota’s commercial location is finalized, all operations will be run from there.

Since incorporation, the company has achieved the following milestones:

• Found commercial space and signed Letter of Intent to purchase it
• Developed the company’s name, logo, and website
• Hired an architect to design the showroom
• Determined equipment and inventory requirements
• Begun recruiting key employees

Wilson Toyota’s Services

Industry analysis.

Wilson Toyota competes against other new and used car dealerships, as well as online-only auto dealers and private consumer sales. The major trend in auto sales is that more people are purchasing vehicles online rather than through a salesperson. To meet this challenge, Wilson Toyota will offer flexible online purchasing through our website.

Even though the industry is changing, it is still growing and remaining profitable. According to Mordor Intelligence, the industry is expected to grow at a CAGR of 4% over the next five years. Even with the increasing demand for public transportation and cleaner forms of transportation, vehicles are still an essential purchase for most Americans.

According to a report by the National Automobile Dealers Association, the car dealership industry is a fragmented one, as the majority of operators are single-location businesses and employ fewer than 20 people. The market is estimated to grow to over $1 trillion in five years. Since there are no truly dominant competitors, barriers to entry are not as high as in many other industries, and a start-up can expect to have success in this growing market, Wilson Toyota is well-positioned for success. There is plenty of room in the industry particularly for conveniently located dealerships that cater to specific demographic trends and demands. In this industry, size does not necessarily mean an advantage, which bodes well for Wilson Toyota.

Customer Analysis

Demographic profile of target market.

Wilson Toyota will serve the residents of Albuquerque, New Mexico and the immediately surrounding areas as well as those who work in the area.

The area we serve is populated mostly by middle-class Millennials; as a result, they have the means to pay for higher-quality vehicles. Further, many are looking to transition to hybrid or electric vehicles, and middle-class earners are the primary demographic for these types of vehicles.

Customer Segmentation

Wilson Toyota will primarily target the following customer profiles:

• Professionals

Competitive Analysis

Direct and indirect competitors.

Wilson Toyota will face competition from other companies with similar business profiles. A description of each competitor company is below.

Gibson Toyota

Gibson Toyota’s goal is to give its customers the best possible experience online and at its physical store. The professional and fun-loving sales team is committed to its customers’ complete satisfaction. Gibson Toyota prides itself on building relationships with its customers throughout all phases of the automotive journey whether it’s sales, service, or parts. Gibson Toyota provides auto sales and services for both new Toyotas and used cars.

While we expect that Gibson Toyota will continue to thrive. But since it is located in the next city, we expect more and more customers will frequent Wilson Toyota based on proximity and competitive prices we offer.

Johnson Auto

Johnson Auto is an independent used car dealership specializing in certified pre-owned vehicles. The team believes that the car-buying process should be as hassle-free as possible. The team takes pride in serving its customers to the fullest. The service center is one of the best in the area, and the team strives to get its customers back on the road as soon as possible. Johnson Auto maintains a convenient online parts inventory, and if a customer can’t find what they want there, the team will help them find what they are looking for. At Johnson Auto, the team is willing to answer each and every question a customer might have during the car buying process.

Wilson Toyota has several advantages over Johnson Auto, in that it specializes in selling and servicing one make of vehicle. Wilson Toyota will provide these specialized services at an affordable price point.

Foster’s Chrysler, Jeep, Dodge, Ram

Foster’s Chrysler, Jeep, Dodge, and Ram offers both new and used inventory, as well as providing service for these makes. The dealership also retails auto parts and accessories. This location also participates in Toyota Rent a Car, in which new Toyotas are rented by the day. Camrys rent for $48.50 per day and Corollas rent for $37.80 per day.

Foster’s Chrysler, Jeep, Dodge, Ram offers some services which are unique to the area, and thus we expect it will continue to draw a large clientele. However, because many of its services are geared toward a rental clientele, we expect to draw buyers who seek the same level of support.

Competitive Advantage

Wilson Toyota will be able to offer the following advantages over its competition:

• Relationships: Having lived in the community for 25 years, Dylan Wilson knows all of the local leaders, newspapers, and other influencers. As such, it will be relatively easy for Wilson Toyota to build brand awareness and an initial customer base.

Marketing Plan

Brand & value proposition.

Wilson Toyota will offer a unique value proposition to its clientele:

• Convenient location
• Large inventory of new and used vehicles
• Highly trained specialists
• Significant personal attention
• Moderate price point
• Comfortable, customer-focused environment

Promotions Strategy

The promotions strategy for Wilson Toyota is as follows:

Commute Advertising

We will drive attention toward Wilson Toyota by leasing a billboard alongside multiple highways. Advertising on heavily traveled commute routes is an opportunity to alert large numbers of working individuals with disposable income of our opening.

Website & SEO Marketing

The company will utilize the website and SEO to attract new customers. The website will be easy to navigate and provide all the information and pictures needed to show our dealership and the vehicles we sell. The SEO strategy will also be managed to ensure that anyone searching for new Toyota vehicles will see our company listed at the top of the Bing or Google search engines.

Social Media Marketing

Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The company will use social media to develop engaging content, such as educational content about vehicles and customer reviews that will increase audience awareness and loyalty. Engaging with prospective clients and business partners on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand changing customer needs.

Advertisement

Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The company will advertise its brand in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.

Wilson Toyota’s pricing will be competitive so customers feel they receive great value when shopping for a new car. The customer can expect to receive quality services and personalized attention when patronizing the dealership.

Operations Plan

The following will be the operations plan for Wilson Toyota.

Operation Functions:

• Dylan Wilson will be the Owner of the company. He will oversee all staff and manage the general operations of the company. He will also partake in customer service and sales until he has employed a full staff of sales professionals. Dylan has spent the past year recruiting the following staff:
• Janie Wilson will serve as the dealership’s Administrative Assistant. She will assist Dylan with all the operational, executive, and administrative aspects of the business. She will also manage the phones until Dylan hires a receptionist.
• Joe Smith will be the Services Manager. He will oversee all the operations of the services department.
• Maria Kenway will be the Sales Manager. She will oversee all the sales staff and help out with customer service, managing sales, and the appraisal process for used vehicles.
• Dylan will hire a full staff of service technicians and sales professionals to help with the service, sales, and customer services functions.

Milestones:

Wilson Toyota will have the following milestones completed in the next six months.

• 3/202X Finalize lease agreement
• 4/202X Design and build out Wilson Toyota
• 5/202X Hire and train initial staff
• 6/202X Kickoff of promotional campaign
• 7/202X Launch Wilson Toyota
• 8/202X Reach break-even

Financial Plan

Key revenue & costs.

Wilson Toyota’s revenues will come primarily from the sale of vehicles and secondarily from the sales of parts/accessories and auto services.

Labor expenses are a major cost driver for dealerships with service departments. Service technicians are salaried; therefore, attractive compensation packages are necessary to maintain qualified staff. Furthermore, large commissions help the dealership keep the best salespeople on staff. Other major cost drivers for the company include the lease, franchise fees, inventory and parts, and marketing expenses.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Average annual franchise fees: $100,000
• Annual lease costs: $100,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Car Dealership Business Plan FAQs

What is a car dealership business plan.

A car dealership business plan is a plan to start and/or grow your car dealership business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Car Dealership business plan using our Car Dealership Business Plan Template here .

What are the Main Types of Car Dealership Businesses?

There are a number of different kinds of car dealership businesses , some examples include: New Car Dealers, Used Car Dealership, and Online Car Dealership.

How Do You Get Funding for Your Car Dealership Business Plan?

Car Dealership businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

This is true for a used car dealership business plan as well.

What are the Steps To Start a Car Dealership Business?

Starting a car dealership business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Car Dealership Business Plan - The first step in starting a business is to create a detailed car dealership business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your car dealership business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your car dealership business is in compliance with local laws.

3. Register Your Car Dealership Business - Once you have chosen a legal structure, the next step is to register your car dealership business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your car dealership business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Car Dealership Equipment & Supplies - In order to start your car dealership business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your car dealership business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful car dealership business:

• How to Start a Car Dealership Business

Where Can I Get a Car Dealership Business Plan PDF?

You can download our free car dealership business plan template PDF here . This is a sample car dealership business plan template you can use in PDF format.

Other Helpful Business Plan Articles

Car Wash Business Plan Template Franchise Business Plan Template Car Detailing Business Plan Template

32 Automobile & Car-Related Business Ideas to Start in 2023

Rishita Jain , Akshat Hawelia

The Automobile industry in India is on the upswing due to the surge in economy and technology. They have opened the gates for many startups and business ideas to flourish. Car care businesses will continue to grow at a faster rate than the overall economy. Forward-looking indicators suggest there is plenty of opportunity for additional growth in the future.

The society of Indian automobile manufacturers is the crown jewel of the transportation industry , and the business opportunities they provide are innumerable. The reason is the increasing population of vehicles. Another reason is the increasing number of average miles driven by individual vehicle owners. The automotive industry is Pandora’s box for many innovative and creative entrepreneurs. So, we are here with some awesome automobile and car-related business ideas for you.

Automobile & Car-related Business Ideas

• Open an Auto Interior Shop
• Lubrication Oil Retail Shop
• Electric Vehicle Charging Station
• Automobile Franchises
• Car Wash Business
• Trucking Business
• Packers and Movers
• Automobile Spraying & Branding Workshop
• Sale of Motor Vehicle Insurance
• Auto Locksmith Business
• Vehicle Licensing Brokerage Service
• Tire Store Retail Business
• Battery Reconditioning Business
• Rental and Ride-Sharing Cars
• Automobile Magazine
• Vehicle Review Blogging
• Mobile Windshield Repairing
• Airport Bus Shuttle Service
• Auto Accessories Store
• Aviation Fuel Supply
• Exporting Automobile Parts
• Auto-Body Store
• Tow Trucking Service
• Automobile Repair Service
• Driving School
• Restoration Business
• Courier Service
• Dump Truck/Waste Disposal Service
• Limo Service
• Mobile Mechanic Service
• Multi-Storied Parking Lot

Automobile & Car-related Business Ideas

1. open an auto interior shop.

An automobile is meant to provide a comfortable, plush, and personal experience that can be personalized to the extent one wishes it to be done. It’s true that the exteriors of an automobile need to be considered for others, but then you must consider the interiors of your vehicle for yourself if not for anyone else.

Automobile accessories shops are known to delight vehicle owners and are becoming really popular these days. An auto interior shop can thus be a great choice if you are looking for an automobile-related business.

2. Lubrication Oil Retail Shop

Fuel oils are certainly a necessity when it comes to an automobile, but we often forget about lubrication oil , which is also as important as the former, if not more. Lubrication oil plays a major part in helping a vehicle to function to its fullest potential. However, oil shops selling lubrication oil are not found everywhere , except in petrol pumps, which makes it more demanding than ever.

3. Electric Vehicle Charging Station

E-vehicles or electric vehicles (EVs) are speedily in prominence. Furthermore, the manufacturing of electric vehicles is also getting all the support of the world to bid adieu to the cursing carbon footprints and usher in a sustainable future for us. Electric vehicles would definitely reduce the overall cost and the total amount of pollution emitted, but they also demand proper charging stations to thrive. Creating or spending on electric vehicle charging stations can, therefore, be an innovative and foolproof idea for anyone looking to build an automobile-related business. Get a detailed guide on How to Start an EV Charging Stations Business in India .

4. Automobile Franchises

The automobile industry is booming at an alarming rate, and automotive business ideas, including automobile franchises, are becoming more and more popular each day with the increasing number of automobiles on the road. Therefore, if you are looking to start with a car business idea, then beginning with an automobile franchise is a safe and lucrative option. These are the Best Automobile Franchise businesses to start in 2021.

5. Car Wash Business

Running a mobile car wash business is a smart way to make a lot of money in the car business without taking much risk of capital investment. The business also eliminates the requirement for a retail business location. Know more about How to Open a Car Wash Business .

6. Trucking Business

The automobile business plan includes transporting goods from the place of manufacture to the consuming state. They transport raw materials, machines, processed food, etc. This can be highly rewarding for the automobile industry in India.

7. Packers and Movers

Life is ever-changing, and we don’t know this moment where we would end up in the next one. However, with promising packers and movers services , we can always ensure the security of our belongings. The need for trustworthy packers and movers will never end. Therefore, packers and movers services always remain one of the most valuable vehicle business ideas of the lot that ensure positive returns.

8. Automobile Spraying & Branding Workshop

Automobiles are not regarded as useful travel companions but are also synonymous with class and status, and above all, should always be maintained well in order to get the service you need. Besides, everyone wants to make their cars look dapper and unique on the road, and it is for this reason that most of them opt for automobile spraying services, which makes their vehicle stand apart from the general fleet. Furthermore, spraying automobiles with the colors of your brand can also lead to effective branding . Therefore, if you are interested in automobiles and looking forward to generating lucrative business ideas in the automobile industry, then setting up a spraying and branding workshop may well be an option for you!

9. Sale of Motor Vehicle Insurance

When there are vehicles, there must be effective ways to protect the owners from thefts, accidents, or damages inflicted on them. Besides, automobiles are quite expensive to not have dedicated insurance policies for them. Insurance policies benefit not only the owners but also those who sell them, so much so that people can hope to create a fortune out of the sale of motor vehicle insurance. Look at the best Insurance franchise businesses in India .

10. Auto Locksmith Business

Automobiles are secured by insurance services and their locks. Can you imagine a car without locks? Truly a nightmare, isn’t it?

Along with the launch of high-end, expensive vehicles, their security is also becoming a growing concern each day. We cannot really say when the locks of our car break down all of a sudden. However, with experienced and reliable locksmiths, we can rest assured. Auto locksmith service is necessary for all who possess automobiles, and the demand for auto locksmith services is not to be any lesser in the near future, making auto locksmith businesses a rare but lucrative choice of business.

11. Vehicle Licensing Brokerage Service

Vehicle licensing is essential regardless of where you stay and the kind of vehicle you possess. Besides, it is very lucrative, too. Do you know a whole industry of people who work in the vehicle licensing sector?

Yes, you can also consider vehicle licensing and brokerage services as part of the diverse array of automotive business ideas while jotting down the business ideas in the automobile industry, provided that the rising demands it is witnessing lately.

12. Tire Store Retail Business

A tire store business opportunity demands full control of inventory and some adequate knowledge about different types of tires that come with different unique numbers. One can start this business in a metropolitan city or in a small town, making it a viable option among various car-related business ideas.

13. Food Truck

The automobile business plan involving food is a new-age concept in India; the food business is always a profitable one. These food trucks attract a wide range of consumers, especially those located near beaches.

14. Battery Reconditioning Business

The battery reconditioning business is providing the service of restoring energy-less batteries to their full original capacity. It can be done by adding some chemicals and using some simple methods. As the vehicle population grows and consumers become more cost-conscious, the potential of increasing this business is obvious.

15. Rental and Ride-Sharing Cars

The automobile business plan of rental and ride-sharing cars grows and consumers become saw the highest growth. A classic example of this is Uber and Ola . The idea of rental cars and ride-sharing is the next big platform for the automotive industry in India.

16. Automobile Magazine

Automobile magazines are among the most profitable automobile business ideas. There is very good demand in the market. By focusing on a niche audience an individual can start this business with proper editorial and marketing infrastructure.

17. Vehicle Review Blogging

Vehicle review blogging is a home-based, low-cost business idea that anyone can start. By using this review blog, you will be helping individuals make decisions about which car or vehicle will be perfect for them.

18. Mobile Windshield Repairing

A mobile windshield repair business can be initiated from a home location with low startup capital. With little inventory and low operating overhead costs, any individual can start this business with a proper marketing strategy .

19. Airport Bus Shuttle Service

Shuttle service in airports needs no introduction. Faster mobility with larger vehicles like buses is indispensable to transport a fairly large crowd to their respective flights inside the airports quickly. Therefore, the airport bus shuttle service, as part of innovative car business ideas, can also serve as an excellent vehicle business idea if you are looking forward to one!

20. Auto Accessories Store

Four-wheelers are expanding more than ever, and with the increasing number of automobiles, the demand for maintaining them is also increasing by leaps and bounds. Auto repair and accessories stores have multiplied their incomes manifold in the last couple of decades, and the demand is here to stay, making it an amazing business plan for those looking to build an automobile-related business.

21. Aviation Fuel Supply

We love to travel . Whether it is traveling within our country or flying abroad, airplanes cut short our journey and make it as comfortable as we want it to be at cost-effective rates. This expansion of the aviation industry has also raised the demand for fuel supply in general. Therefore, if you are thinking about vehicle business ideas, you might well include aviation fuel supply services in your plan!

22. Exporting Automobile Parts

The automobile business plan leads to the way to exporting their parts. Many foreign manufacturers are relying on India for spare parts due to various factors that make their products much more efficient. Major global luxury brands source their spare parts from India.

23. Auto-Body Store

The auto-body store business provides auto-body repair and new bodybuilding services and sells spare parts and accessories related to the vehicle body. As the number of vehicles is growing, the business opportunity of auto-body stores is also increasing globally.

24. Tow Trucking Service

A Tow Truck service business provides services to help damaged or abandoned vehicle owners wheel their cars to the service station or to the desired parking destination. An individual with demographic ideas and knowledge about the towing arrangement for the breakdown vehicle can initiate this business with substantial capital investment.

Tow Trucking Business Example

25. Automobile Repair Service

Among the automobile business ideas, this business idea is perineal and thriving. It is a quintessential model of business in this industry that can be highly rewarding. It goes without saying that automobiles require regular service, and due to constant usage, they need to be repaired.

26. Driving School

Establishing a driving school can be a self-rewarding and profit-making venture. An individual with a flair for marketing can initiate driving school business with moderate capital investment.

27. Restoration Business

The revival of vintage cars has been a luxury for many due to the scarcity of restoration professionals. After the internet boom in India, the restoration of automobiles has picked up some pace, along with other car business ideas. As the economy changed its course, so did the taste of the people of India, which led to “customization” according to their personal needs. Also, the metro cities are hosting many festivals showcasing vintage cars . The once-old cars of no use are now restored to pristine condition. The restoration of automobiles, including various car business ideas, can be highly profitable based on the automotive industry in India and the quality of work.

28. Courier Service

Do you know that the oldest courier service in India is the Indian Postal Service? The courier service company was established in the country on April 15, 1774. An industry with a rich history of around 224 years has only bettered and grown far and wide across the country, showcasing opportunities for various automobile business ideas. Furthermore, it has been and is continuing to be a huge opportunity for any startup company to be established in this sector, with vehicles holding a central place in these services. Therefore, it is surely one of the most lucrative vehicle business ideas to invest time in! Click here to learn about the Top Courier and Delivery Franchise Business in India .

29. Dump Truck/Waste Disposal Service

Fresh delivery and disposal services go hand in hand. Effective disposal service is the need of the hour, and this need is pushing the industry to invite promising newcomers with decent ROI. Waste management has become a necessity. If you are wondering about innovative and promising automobile business ideas, then dump trucks or waste disposal services may well be your option, given the rise it has witnessed in the past years.

30. Limo Service

The automobile industry has grown with time, packing inconvenience, comfortability, cost-effectiveness, and luxury at the same time. Along with affordable cars that cater to the needs of the general public, four-wheelers have not disappointed the upper class or the rich people of society with the help of the premium vehicles that the industry boasts of. Limo service is one of the high-end services modeled on the automobile industry and can serve as a towering idea when it comes to automobile-related businesses, including premium automobile business ideas.

31. Mobile Mechanic Service

Automobile businesses perform well only when they are maintained well. Automobile repair or maintenance is, therefore, a key to any well-functioning automobile. Mechanic services for automobiles were earlier stationary. With the emergence of mobile mechanic services, the industry is simply witnessing a revolution. This is also bringing in a host of fresh employment opportunities and, along with it, driving this present generation of entrepreneurs.

32. Multi-Storied Parking Lot

The escalating numbers of vehicles worldwide amplify the challenges associated with finding adequate parking space, especially in major cities. Launching a multi-storied parking facility designed to accommodate various vehicle types, including cars and trucks, stands out as one of the most lucrative automobile business ideas in the realm of automobile-related businesses.

We hope the above list of automobile business ideas will help you make an informed decision. We will definitely update this list of Automobile and Car-related business ideas as we get more industry information. So stay tuned!

What are the top automobile companies in India?

Some of the top automobile business companies in India are:

• Tata Motors Ltd
• Maruti Suzuki India Ltd
• Mahindra Group
• Hero MotoCorp Ltd
• Bajaj Auto Ltd
• Ashok Leyland Ltd
• TVS Motor Company Ltd
• Force Motors Ltd

Which car business is most profitable?

Some of the most profitable car business ideas are:

• Auto Interior Shop
• Car Accessories Store

What are some of the common automotive industry jobs?

The automotive industry is expanding with numerous job offerings that a lot of people opt for. Some of the most common automotive industry jobs today are associated with:

• Car rental services
• Vehicle inspection services
• Automobile designing
• Automobile manufacturing
• Automobile selling
• Automobile repairing
• Fleet operating

How is the vehicle industry growing?

The vehicle industry is growing today at a pace that was never seen before. The global sales of the automobile business are reported to be around 67.2 million units in 2022.

Is starting a tow truck business a good idea?

Starting a tow truck business might sound like a good idea, but it is important to learn that a tow truck business can prove to be a big time and money investment for some people. Therefore, it is essential to plan a long-term conversion through the same.

What are some lucrative automotive franchises in India?

If you are wondering about some of the most profitable automotive franchises in India:

• EV Techo Electra Motors
• Mahindra First Choice
• AAMCO Transmissions and Total Car Care
• EV Motors India
• Wheeler Cleaner

How to start an automobile business?

• Conduct thorough market research to identify a niche or demand, then create a detailed business plan.
• Obtain necessary licenses, secure funding, and establish supplier relationships before launching your automobile business.

Must have tools for startups - Recommended by StartupTalky

• Manage your business smoothly- Google Workspace

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Welcome to University Auto Sales

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Welcome to University Auto Sales, your reliable destination for quality used cars in Moscow, Idaho , Lewiston, Idaho and the surrounding areas. We appreciate you choosing University Auto Sales as your used car dealership, catering to drivers in Moscow, Lewiston and the surrounding areas. Explore our diverse range of pre-owned vehicles, carefully selected to meet your expectations. Our dealership takes pride in offering a seamless car-buying experience. Navigate through our user-friendly website, where you can conveniently browse our extensive inventory from the comfort of your home. Whether you're in search of a dependable sedan, a versatile SUV, a spacious minivan, or a robust truck, we have the ideal vehicle to suit your requirements and budget. If we do not have the vehicle currently on our lot we can work to find a vehicle that meets your needs.

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Why Choose University Auto Sales?

At University Auto Sales, we recognize that purchasing a used car is a significant decision. To ensure your peace of mind, our team of automotive experts rigorously inspects and reconditions each vehicle in our inventory, maintaining stringent standards of quality and reliability. Customer satisfaction is our utmost priority, and our friendly sales team is committed to providing exceptional service.

Exceptional Customer Service

Our commitment to making the car-buying process easy and hassle-free is reflected in the competitive financing options we offer. Our finance experts are dedicated to assisting you in securing an auto loan that aligns with your budget. Visit our Moscow or Lewiston dealership today to experience the University Auto Sales difference firsthand.

Discover the University Auto Sales

Whether you're perusing our inventory online , scheduling a test drive, or seeking personalized assistance, our team is ready to help. Drive home in your dream car from University Auto Sales and understand why we are the preferred choice for used vehicles in Moscow, Idaho , Lewiston, Idaho , and beyond. Thank you for considering University Auto Sales, where quality and exceptional service meet. We have 2 locations 2 serve in Moscow Idaho and Lewiston Idaho so please call us for the location of a vehicle you are interested in. 2308 HWY 95 South Moscow Idaho 83843 157 Thain Road Lewiston Idaho 83501

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Edited By Alain Sherter

Updated on: June 24, 2024 / 12:09 PM EDT / CBS News

Car dealers across the U.S. are floundering after cyberattacks this week on CDK Global , a maker of software used to operate their businesses, made it all but impossible to sell vehicles. 

Tom Maoli, who owns Celebrity Motor Car Company, which operates five luxury car dealerships across New York and New Jersey, told CBS MoneyWatch his business is "completely shut down."

"We cannot process paperwork. Everything is frozen, everything is tied up — we cannot move money back and forth to pay off cars, to finance our customers' transactions," he said. 

Such disruptions are particularly damaging to sales-driven businesses like auto dealerships, where car shoppers who are primed to lay down their cash on a vehicle may walk away when faced with frustrating delays. Maioli said that while he's trying to keep customers engaged, he has no sense of when his sales systems will be fully functional again, leaving the business in limbo.

The company's dealer management system, which is used by some 15,000 dealerships, remained unavailable Thursday and Friday, causing headaches for dealers and would-be car buyers.

For one family in New Jersey, the outage meant they couldn't drive away with their new Audi Q5. Daniel Lanni told  Bloomberg  his family was expecting the vehicle to be delivered on June 19, but that it now remains unclear when they'll take possession.

"The kids were really excited," Lanni, a 41-year-old commercial real estate broker, told Bloomberg. "They're upset and now they're just regularly asking about it."

On Wednesday, CDK Global took down its services as a precaution, effectively bringing sales to a halt for its customers. A second cyberattack this week has compounded the problem. 

CDK has indicated that the outage could last several days and has not publicly announced when it expects its services to be fully restored. The financial repercussions of the tech failure are expected to be substantial given that CDK powers sales for roughly half of the car dealerships in the U.S.

"Royal pain in the rear"

Geoff Pohanka, chairman of Pohanka Automotive Group, told CBS MoneyWatch that 20 of the company's dealerships rely on CDK's dealer management system, or DMS, to operate.

"We are very dependent upon the DMS, and it affects all parts of our business," he said. "It generates all of our forms. If you come in, we enter you in the system, it builds a file in terms of paperwork and finance papers, and right now none of that is functioning."

Pohanka, who said the dealership still has phone and internet service, said the business is doing its best to keep sales rolling. "We may not be able to have all the documents signed and will need to bring the customer back in to complete them, but we still can function," he said, while conceding that "everything takes longer [and] is more complicated." 

The DMS outage also affects the company's service and parts department. Typically, the dealership uses CDK software to generate electronic contracts and print out work orders. Now, they're operating manually, which is slower.

"We will certainly lose business because it takes longer to complete transactions, and some things will fall through the cracks. There will be losses," Pohanka said. "It's debilitating, and the longer it goes on the harder it will be for dealers. I know we will lose revenue. It really is a royal pain in the rear." 

Sport Honda, a Honda dealer and CDK customer in Silver Spring, Md., is also scrambling to continue serving customers.

"It's a difficult task, but there was paper before there were computers so we have to go about it that way," a dealership manager told CBS MoneyWatch. "You can move around the computer software and go back and do things like you did back in the day." 

Employees at other dealerships took to social media forums to say they were tracking orders on "sticky notes" or using Excel spreadsheets to log transactions. 

For CDK, the fallout may not only be technological. Maioli, the car dealership owner, said he's retained legal counsel and is mulling a class-action lawsuit against the company. 

• Cyberattack
• Auto Industry

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.

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Sample Used Car Dealership Business Plan

Writing a business plan is a crucial step in starting a used car dealership business. Not only does it provide structure and guidance for the future, but it also helps to create funding opportunities and attract potential investors. For aspiring used car dealership business owners, having access to a sample used car dealership business plan can be especially helpful in providing direction and gaining insight into how to draft their own used car dealership business plan.

Download our Ultimate Used Car Dealership Business Plan Template

Having a thorough business plan in place is critical for any successful used car dealership business venture. It will serve as the foundation for your operations, setting out the goals and objectives that will help guide your decisions and actions. A well-written business plan can give you clarity on realistic financial projections and help you secure financing from lenders or investors. A used car dealership business plan example can be a great resource to draw upon when creating your own plan, making sure that all the key components are included in your document.

The used car dealership business plan sample below will give you an idea of what one should look like. It is not as comprehensive and successful in raising capital for your used car dealership business as Growthink’s Ultimate Used Car Dealership Business Plan Template , but it can help you write a used car dealership business plan of your own.

Used Car Dealership Business Plan Example – PreLoved Motors

Table of contents, executive summary, company overview, industry analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team, financial plan.

PreLoved Motors, situated in the bustling heart of the St. Louis, MO area, is a pioneering used car dealership dedicated to offering an expansive selection of high-quality, pre-owned vehicles. Our business model is built on the foundation of trust, reliability, and exceptional customer service, aiming to redefine the used car buying experience. By focusing on meticulously vetted, versatile vehicles, we ensure our customers receive cars that are not just reliable but also offer the best value for their money. Our commitment to affordability, without compromising on quality, positions us as a unique entity in the competitive used car market, making vehicle ownership accessible to a broader demographic in our community.

Key to our success has been our ability to curate a diverse inventory that meets the high standards of condition and reliability our customers expect. This commitment, combined with competitive pricing and a customer-centric sales approach, has allowed us to stand out in a crowded marketplace. To date, our accomplishments include establishing a loyal customer base, building a strong brand presence in the St. Louis area, and consistently achieving positive feedback for our service quality and vehicle lineup. Our adeptness at adapting to market demands and customer needs continues to fuel our growth and success in the used car dealership industry.

The used car dealership industry is undergoing significant transformation, driven by shifting consumer preferences towards more cost-effective and reliable transportation options. The demand for pre-owned vehicles has seen a steady increase, particularly in urban areas like St. Louis, MO, where economic considerations play a crucial role in consumer purchase decisions. This trend is further bolstered by advancements in vehicle technology and maintenance, which have extended the lifespan of cars, making used vehicles an even more attractive option for budget-conscious buyers. However, the industry is also characterized by intense competition, with dealerships vying to offer the best mix of quality, price, and service to attract discerning customers. In this dynamic environment, dealerships that can effectively differentiate themselves through superior product offerings and exceptional customer service are poised to capture significant market share.

Our target customers range from first-time car buyers to seasoned vehicle enthusiasts, all seeking reliable, affordable pre-owned vehicles in the St. Louis, MO area. These individuals prioritize value for money, vehicle reliability, and a transparent, hassle-free buying experience. Our market research indicates a growing segment of environmentally conscious consumers interested in fuel-efficient and hybrid models, reflecting broader societal shifts towards sustainability. Catering to this diverse clientele, we tailor our inventory and services to meet the nuanced needs and preferences of our customer base, ensuring a personalized, satisfying purchase journey for every buyer.

Enterprise Car Sales, iAutoAgent, and 123 Auto are our main competitors, each with their unique selling propositions from wide-ranging inventories to personalized brokerage services. However, PreLoved Motors distinguishes itself through a curated selection of quality vehicles, competitive pricing, and a transparent, customer-first sales approach. Our deep understanding of local market dynamics and consumer preferences enables us to offer tailored solutions that not only meet but exceed customer expectations, setting us apart as a trusted name in the used car industry.

At PreLoved Motors, our product lineup is carefully selected to ensure a wide range of high-quality, reliable pre-owned vehicles that cater to various customer needs and preferences. We emphasize competitive pricing to make vehicle ownership accessible to a broader audience, without compromising on quality. Our promotions plan is multifaceted, leveraging both digital and traditional marketing channels to reach potential customers effectively. We focus on digital marketing strategies, including SEO, social media advertising, and email marketing, to build brand awareness and engage with our audience. Simultaneously, local community engagement and strategic partnerships are employed to establish a strong local presence and drive foot traffic to our dealership.

Our operational strategy is centered around maintaining a seamless flow from vehicle acquisition to customer sale, ensuring each car meets our stringent quality standards before it reaches the showroom floor. Key operational processes include meticulous vehicle inspection, certification, and detailing, alongside efficient inventory management to keep pace with market demand. Milestones to be accomplished involve expanding our inventory to include electric and hybrid vehicles, implementing a customer relationship management (CRM) system to enhance customer service, and achieving a set sales growth target in the next fiscal year, thereby solidifying our market position.

The management team at PreLoved Motors is a blend of industry veterans and dynamic young professionals, bringing together decades of experience in automotive sales, marketing, and operations. Our leadership is committed to fostering a culture of innovation, excellence, and integrity, guiding the company towards sustained growth and success in the competitive used car market. This diverse expertise ensures that we remain agile in our strategic approach, capable of navigating industry challenges while capitalizing on emerging opportunities.

At PreLoved Motors, we are proud to introduce ourselves as a new Used Car Dealership dedicated to serving the unique needs of the St. Louis, MO community. Our establishment fills a significant gap in the local market for high-quality, pre-owned vehicles. Unlike the existing offerings, we focus on delivering exceptional value and customer service, ensuring every customer finds the perfect vehicle to match their needs and budget.

Our product lineup is extensive, featuring a diverse range of vehicles to cater to the varied preferences and requirements of our customers. From sedans that combine efficiency and comfort, to SUVs (Sport Utility Vehicles) that offer the versatility for both city driving and off-road adventures, we have something for everyone. For customers in need of robust performance, our selection of trucks is second to none. We also stock an exciting range of coupes and convertibles for those seeking a more exhilarating driving experience. Additionally, our vans and minivans are perfect for families or businesses looking for practical, spacious vehicle solutions.

PreLoved Motors is strategically located in St. Louis, MO, making it accessible to customers throughout the city and beyond. Our commitment to serving the St. Louis community is unwavering, and we aim to become a trusted partner for anyone looking to purchase a high-quality used vehicle.

We are uniquely positioned for success, thanks to a combination of factors. Firstly, our founder brings invaluable experience from previously operating a successful used car dealership, ensuring that we have the knowledge and expertise to thrive in this industry. Secondly, our inventory stands out for its versatility, practicality, and affordability. We meticulously select vehicles that not only meet but exceed the expectations of our customers in terms of condition and value for money. This commitment to excellence sets us apart from our competitors and forms the foundation of our business.

Since our founding on January 3, 2024, PreLoved Motors has achieved several significant milestones. As an S Corporation, we have laid a solid foundation for our business operations. Our accomplishments to date include the creation of a distinctive logo that reflects our brand identity, the development of our company name that resonates with our mission, and securing a prime location that offers convenience and visibility to our customers. These achievements are just the beginning of our journey towards becoming the premier choice for used cars in St. Louis, MO.

The Used Car Dealership industry in the United States is a thriving market with a current size of over $120 billion. This industry has shown steady growth over the past few years, with an expected annual growth rate of 2.5% in the next five years. This growth can be attributed to several factors, including the increasing demand for affordable vehicles and the rising popularity of certified pre-owned cars.

One of the key trends in the Used Car Dealership industry is the shift towards online sales and digital platforms. Consumers are increasingly turning to online channels to research, compare, and purchase used cars, making it essential for dealerships to have a strong online presence. This trend bodes well for PreLoved Motors, as a new dealership in St. Louis, MO, as it can leverage digital marketing strategies to reach a wider audience and attract more customers.

Another trend in the industry is the growing focus on customer experience and transparency. Consumers are becoming more informed and cautious when purchasing used cars, placing a premium on dealerships that offer quality vehicles and trustworthy services. PreLoved Motors can differentiate itself by providing excellent customer service, offering detailed vehicle histories, and establishing a reputation for honesty and integrity in the market.

Below is a description of our target customers and their core needs.

Target Customers

PreLoved Motors will target local residents looking for affordable and reliable transportation options. This customer segment is primarily composed of individuals and families seeking value in the used car market, aiming to maximize their investment without compromising on quality. The dealership will tailor its inventory and services to meet the needs of this diverse group, ensuring a wide range of vehicles that cater to various preferences and budgets.

In addition to local residents, PreLoved Motors will also attract first-time car buyers. This group is typically searching for economical choices and may require guidance through the purchasing process. The dealership will provide educational resources and personalized assistance, making the car buying journey as smooth and reassuring as possible for these customers.

Another significant customer segment includes individuals looking for specialty vehicles or those interested in cars with unique features. PreLoved Motors will cater to enthusiasts and collectors seeking rare finds or specific models not readily available in the new car market. By maintaining a varied and intriguing inventory, the dealership will become a go-to destination for those pursuing distinct automotive experiences.

Customer Needs

PreLoved Motors recognizes the importance of providing high-quality vehicles to residents who prioritize reliability and value in their automotive choices. Customers can expect a carefully curated selection of pre-owned cars that meet strict standards for performance, safety, and aesthetics. This commitment ensures that every vehicle on the lot is not only a mode of transportation but also a source of pride for its new owner.

In addition to offering high-quality vehicles, PreLoved Motors understands the significance of an exceptional purchasing experience. Customers can anticipate attentive service that focuses on their unique needs and preferences, making the car buying process both enjoyable and efficient. The dealership also offers comprehensive after-sales support, ensuring that customers have access to maintenance and advice, further enhancing the longevity and enjoyment of their vehicles.

Moreover, PreLoved Motors caters to the financial needs of its customers by providing flexible financing options. This approach allows individuals from various economic backgrounds to find a vehicle that fits their budget without compromising on quality. By facilitating easier access to financing, PreLoved Motors ensures that more residents can experience the joy and convenience of owning a dependable and aesthetically pleasing vehicle.

PreLoved Motors’s competitors include the following companies:

Enterprise Car Sales offers a wide range of used vehicles, including cars, trucks, and SUVs. Their price points vary significantly, depending on the vehicle’s make, model, year, and condition. Enterprise Car Sales generates significant revenue, leveraging its brand strength and extensive network of car rental locations that serve as sources for many of its used vehicles for sale. Enterprise Car Sales has locations across the United States, making it accessible to a broad customer segment. They serve individual buyers looking for reliable used vehicles and business clients seeking fleet solutions. The company’s key strengths include a large and diverse inventory, a well-known brand, and a comprehensive certification process that ensures the quality of their vehicles. However, their prices can be higher than those of smaller competitors due to their brand prestige and certification processes.

iAutoAgent differentiates itself by offering a broker-like service for buyers and sellers of used cars. They facilitate the sale process, aiming to get sellers the highest price for their vehicle while providing buyers with a transparent and hassle-free purchasing experience. iAutoAgent’s revenue comes from commissions and fees associated with their brokerage services. iAutoAgent operates primarily in the St. Louis, MO area, focusing on local clients but also dealing with customers from neighboring regions. They cater to individual buyers and sellers, emphasizing quality customer service and convenience. Key strengths include personalized service and a hassle-free buying and selling process. However, their reliance on local markets might limit their growth potential compared to larger, nationwide competitors.

123 Auto is a used car dealership known for offering a wide selection of vehicles at competitive prices. They focus on affordability, aiming to attract budget-conscious buyers. Their revenue is generated through vehicle sales, with an emphasis on volume over high margins. 123 Auto operates in the St. Louis, MO area, serving a similar geographical market as PreLoved Motors. Their primary customer segment includes individuals looking for affordable used cars, particularly first-time buyers and those with limited budgets. The dealership’s key strengths are its competitive pricing and diverse inventory. However, their focus on lower-priced vehicles might affect their perceived quality and limit their appeal to customers with higher budgets.

Competitive Advantages

At PreLoved Motors, we pride ourselves on offering a diverse selection of versatile and practical vehicles that stand out in the market. Our inventory is carefully curated to ensure that each car meets our high standards of condition and reliability, providing our customers with peace of mind in their purchases. Our commitment to affordability further sets us apart, as we strive to offer competitive pricing that makes owning a quality pre-owned vehicle accessible to a wide range of buyers. This combination of quality, variety, and value positions us as a leader in the used car dealership industry, catering to the unique needs and preferences of our clientele in the most efficient and cost-effective manner possible.

Beyond our diverse inventory and competitive pricing, our customer service philosophy also serves as a significant competitive advantage. We believe in a transparent, no-pressure sales environment that allows our customers to explore their options comfortably and make informed decisions. Our knowledgeable team is dedicated to providing personalized assistance, ensuring that each customer finds a vehicle that perfectly fits their lifestyle and budget. This customer-centric approach has cultivated a loyal customer base and distinguishes us from competitors who might prioritize sales over service. By combining outstanding vehicles, fair pricing, and exceptional customer service, we not only meet but exceed customer expectations, solidifying our position as a trusted name in the used car market.

Our marketing plan, included below, details our products/services, pricing and promotions plan.

Products and Services

At PreLoved Motors, customers can find a diverse range of quality used vehicles tailored to fulfill various driving needs and preferences. The dealership prides itself on offering an assortment of automotive categories, including sedans, SUVs (Sport Utility Vehicles), trucks, coupes and convertibles, as well as vans and minivans. Each category comes with an average selling price, ensuring that prospective buyers can make informed decisions based on their budget and requirements.

Sedans are a staple at PreLoved Motors, known for their practicality and fuel efficiency. Ideal for daily commutes and long-distance travel, these vehicles are offered with an average selling price of around $15,000. This price range allows customers to access a variety of models and trims that cater to both economy and luxury preferences.

SUVs stand out for their versatility and space, making them perfect for families and adventure enthusiasts alike. At PreLoved Motors, customers can explore a wide selection of SUVs with an average selling price of $20,000. This price bracket encompasses a range of sizes from compact to full-size SUVs, each equipped with features that enhance comfort, safety, and off-road capability.

For those requiring robust performance and hauling capacity, trucks are an excellent option. PreLoved Motors offers a collection of used trucks with an average selling price of $25,000. This segment includes both light-duty and heavy-duty trucks, catering to various commercial and personal use cases, ensuring that customers find the right balance between power and efficiency.

Coupes and convertibles at PreLoved Motors appeal to those seeking a blend of style and performance. With an average selling price of $18,000, customers can expect to discover models that offer exhilarating driving experiences without compromising on luxury and technological advancements. These vehicles are perfect for driving enthusiasts looking to enjoy the road to its fullest.

Last but not least, vans and minivans are the go-to options for customers prioritizing space and convenience for family or group travels. With an average selling price of $17,000, PreLoved Motors provides access to a range of vehicles that offer ample seating, cargo space, and advanced safety features, ensuring a comfortable and secure journey.

In summary, PreLoved Motors caters to a wide audience by offering a comprehensive selection of used vehicles across various categories, each with a competitive average selling price. Whether customers are in search of economy, luxury, performance, or practicality, they can expect to find a vehicle that not only meets their needs but also fits their budget.

Promotions Plan

PreLoved Motors embarks on a strategic journey to attract customers through a comprehensive blend of promotional methods. In the heart of these efforts lies online marketing, a cornerstone that enables the dealership to connect with a vast audience. The company leverages social media platforms, search engine optimization (SEO), and email marketing to create a robust online presence. Social media campaigns on platforms like Facebook, Instagram, and Twitter serve as a direct line to potential customers, offering them a glimpse into the quality and variety of vehicles available. By optimizing their website for search engines, PreLoved Motors ensures that when prospective buyers search for used cars in St. Louis, MO, their dealership appears among the top results, significantly increasing visibility.

Email marketing campaigns are meticulously crafted to keep subscribers informed about the latest deals, new inventory arrivals, and exclusive promotions, fostering a sense of community and loyalty among customers. Furthermore, PreLoved Motors embraces the power of content marketing, crafting engaging blog posts and videos that showcase their expertise in the used car market, driving traffic to their website, and establishing trust with their audience.

Beyond the digital realm, PreLoved Motors invests in local community engagement to build brand awareness and cultivate strong relationships with potential customers. Participating in local events, sponsoring community sports teams, or hosting car maintenance workshops exemplify how the dealership embeds itself into the fabric of the St. Louis community. These initiatives not only enhance visibility but also demonstrate PreLoved Motors’ commitment to contributing positively to the community they serve.

Customer referrals play a pivotal role in the promotional strategy. Encouraging satisfied customers to refer friends and family through a referral program with incentives for both the referrer and the referee ensures a continuous pipeline of potential buyers. This word-of-mouth marketing is invaluable, as personal recommendations carry significant weight in purchasing decisions.

To complement these efforts, PreLoved Motors also explores traditional advertising avenues such as radio spots, local newspapers, and billboards strategically placed around St. Louis. This multi-channel approach ensures that the dealership remains top of mind for a diverse demographic, spanning those who are deeply embedded in digital landscapes to those who appreciate more traditional forms of media.

In summary, PreLoved Motors employs a dynamic mix of online marketing, community engagement, customer referral programs, and traditional advertising to create a comprehensive promotional strategy. By connecting with the community both online and offline, the dealership expects to attract a wide range of customers, making it a go-to destination for quality used vehicles in St. Louis, MO.

Our Operations Plan details:

• The key day-to-day processes that our business performs to serve our customers
• The key business milestones that our company expects to accomplish as we grow

Key Operational Processes

To ensure the success of PreLoved Motors, there are several key day-to-day operational processes that we will perform.

• Inventory Management: We constantly monitor and update our inventory to ensure a wide selection of quality used cars. This includes purchasing vehicles at auctions, from private sellers, and accepting trade-ins.
• Vehicle Inspection and Maintenance: Every car undergoes a thorough inspection and any necessary maintenance or repairs before it is listed for sale. This ensures all vehicles meet our high standards for quality and safety.
• Pricing Strategy: We regularly analyze market data to price our vehicles competitively. This involves reviewing local and national sales trends for similar vehicles and adjusting prices to offer the best value to our customers.
• Customer Service: We prioritize excellent customer service, ensuring every visitor receives personal attention. This includes responding promptly to inquiries, offering test drives, and providing transparent information about each vehicle.
• Financing and Insurance Assistance: We assist customers with securing financing and insurance for their vehicle purchases. This involves working with a network of lenders and insurance providers to offer competitive rates and terms.
• Marketing and Advertising: We implement targeted marketing and advertising campaigns to attract potential buyers. This includes online advertising, social media engagement, and local community events.
• Sales Process Management: We streamline the sales process to make purchasing a vehicle as smooth and efficient as possible. This includes negotiating deals, processing paperwork, and offering warranties or service contracts.
• After-Sales Support: We provide ongoing support to our customers after their purchase. This includes follow-up calls to ensure satisfaction, offering maintenance services, and addressing any concerns or issues that may arise.
• Staff Training and Development: We invest in regular training and development for our team to ensure they are knowledgeable about our inventory, finance options, and customer service best practices.
• Compliance and Legal Requirements: We ensure all business operations comply with local, state, and federal regulations, including vehicle sales laws, consumer protection statutes, and environmental standards.

PreLoved Motors expects to complete the following milestones in the coming months in order to ensure its success:

• Securing a Prime Location : Identifying and securing a strategically located dealership space in St. Louis, MO, that is accessible and visible to our target customer base. This involves negotiating a favorable lease that aligns with our financial projections and growth plans.
• Obtaining Necessary Licenses and Permits : Completing all regulatory requirements, including obtaining a used car dealership license, business license, and any other permits required by local, state, and federal laws. This ensures compliance and legal operation within the industry.
• Building Inventory Acquisition Channels : Establishing reliable channels for acquiring a diverse and quality inventory of used cars. This includes forming partnerships with auction houses, rental car companies, and trade-in programs to ensure a steady supply of vehicles that meet our quality standards and customer preferences.
• Developing a Robust Sales and Marketing Strategy : Crafting and implementing a comprehensive sales and marketing plan that includes digital marketing, local advertising, and community engagement activities to build brand awareness and drive traffic to the dealership.
• Setting Up Operational Infrastructure : Creating the operational backbone of the dealership, including the development of sales processes, customer service protocols, financial management systems, and the implementation of a CRM system to manage leads and customer interactions efficiently.
• Hiring and Training a High-Performing Team : Recruiting a team of experienced salespeople, finance experts, and administrative staff. Providing comprehensive training to ensure they are equipped with the knowledge and skills to deliver exceptional customer service and drive sales.
• Launch Our Used Car Dealership : Officially opening PreLoved Motors for business with a launch event to generate buzz in the community and attract our first customers.
• Implementing Customer Feedback Mechanisms : Establishing channels for customer feedback to continuously improve our inventory selection, customer service, and overall buying experience based on direct input from our clients.
• Achieving $15,000/Month in Revenue : Reaching this critical financial milestone to demonstrate market acceptance, operational efficiency, and the potential for scalability and long-term profitability.
• Continuous Monitoring and Adjusting of Business Strategy : Regularly reviewing financial performance, market trends, and customer feedback to make informed decisions on inventory, pricing, marketing strategies, and operational adjustments to ensure sustained growth and success.

PreLoved Motors management team, which includes the following members, has the experience and expertise to successfully execute on our business plan:

Ariana Bell, CEO

Ariana Bell, CEO, brings to PreLoved Motors a track record of undeniable success in the automotive industry. With her extensive experience in running a used car dealership, Ariana has shown an exceptional ability to navigate the complexities of the used car market, drive sales, and maintain high customer satisfaction. Her leadership skills, combined with a deep understanding of market trends and consumer behavior, make her uniquely qualified to steer PreLoved Motors towards lasting success. Ariana’s vision for the company is not just about selling cars; it’s about creating a trusted brand in the pre-owned vehicle sector, ensuring that every customer feels valued and confident in their purchase.

To achieve our growth objectives, PreLoved Motors requires significant capital investment. This funding will be allocated towards expanding our vehicle inventory, enhancing our marketing efforts, and upgrading our facilities to improve the customer experience. Our financial plan is designed to ensure we have the resources needed to scale our operations effectively, drive sales growth, and maintain our competitive edge in the market.

Financial Statements

Balance sheet.

[insert balance sheet]

Income Statement

[insert income statement]

Cash Flow Statement

[insert cash flow statement]

Used Car Dealership Business Plan Example PDF

Download our Used Car Dealership Business Plan PDF here. This is a free used car dealership business plan example to help you get started on your own used car dealership plan.  

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CDK Global says car dealership software may be down until June 30

The cyberattack has forced thousands of car dealers to revert to pen and paper for business operations..

By Bloomberg Wire

4:02 PM on Jun 25, 2024 CDT

Car dealerships crippled by a cyberattack on software provider CDK Global probably won’t have their systems restored until the end of the month.

In a message to clients Tuesday, CDK warned dealerships that because the outages could persist until June 30, they may need to make alternative plans on how to handle their end-of-month finances. Thousands of dealerships, which rely on CDK’s software for nearly every business function, ground to a halt last week following the compromise.

The latest message from the company indicates that large swaths of the U.S. auto sales sector may ultimately be handicapped by the attack for nearly two weeks.

Related: D-FW auto dealers shift gears after ransomware attacks disrupt operations

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“We do feel it’s important to share that we do not believe that we will be able to get all dealers live prior to June 30th,” CDK Global said in a recorded message on its customer help phone line. “Should you need to make alternate plans for your month-end financial close process, you should do so.”

Representatives for the company didn’t immediately respond to a request for comment about the latest client communication Tuesday.

CDK’s software products, including its core dealer management system, went down in the early hours of June 19, with the company saying it had shut off all systems amid what it called a cyber incident.

The Hoffman Estates, Illinois-based company was attacked by a hacking group known as BlackSuit, according to Allan Liska, a threat analyst at the security firm Recorded Future Inc.

The cybercrime group has demanded an extortion fee in the tens of millions of dollars from CDK, which plans to make the payment, Bloomberg News reported on Friday.

Ransom payments in cyberattacks often entail haggling over a fee, and it’s unclear where the process stands with CDK.

- Jake Bleiberg for Bloomberg

Bloomberg Wire

Software company plans to pay tens of millions in ransom to hackers who crippled car dealerships across North America

A group that claims to have hacked CDK Global , the software provider to thousands of car dealerships in North America, has demanded tens of millions of dollars in ransom, according to a person familiar with the matter.

CDK is planning to make the payment, said the person, who asked not to be identified because the information is private. The hacking group behind the attack is believed to be based in eastern Europe, the person said. In the early days of any ransomware attack, discussions are fluid, and the situation could change. 

CDK didn’t respond to multiple requests for comment on Friday. 

Since CDK discovered the breach and shut off systems on  June 19 , chaos has ensued at many of the roughly 15,000 car dealerships that it counts as clients. CDK’s core product — a suite of software tools referred to as a dealership management system, or DMS — underpins virtually every element of auto retailers’ day-to-day business. So the outage hampered sales, interrupted repairs and delayed deliveries across an industry that topped  $1.2 trillion  in US sales last year. The disruptions also are hitting amid an end-of-quarter sales push.

“It’s just mass chaos at this point,” Diana Lee, the chief executive officer of Constellation, a marketing agency that works with auto dealerships across the US, said on Bloomberg Television. “The dealer’s required to actually run a DMS for sales, service, parts, for every single functionality — even stocking a vehicle, you can’t do it without the DMS system. So it is a disaster.” 

CDK had briefly restored some services for a few hours on June 19, but was forced to deactivate them following a second cyberattack. On Thursday, the company warned dealers that their systems likely will not be available for  several days .

A demand in the tens of millions of dollars comes after hackers  sought $50 million  from a lab services company at the center of an ongoing ransomware attack that’s caused outages in London hospitals. UnitedHealth Group Inc., the largest medical insurer in the US, acknowledged earlier this year  it paid hackers  a $22 million extortion fee.

CDK hasn’t said who or which entity is behind the intrusion, but it issued a warning to customers Thursday evening, saying that outside parties are reaching out to customers, attempting to capitalize on the confusion.

“We are aware that bad actors are contacting our customers, posing as members or affiliates of CDK, trying to obtain system access,” the company said. “CDK associates are not contacting customers for access to their environment or systems. Please only respond to known CDK employees and communications.”

There are only a handful of DMS companies for dealers to choose from after decades of consolidation within this corner of the car-retailing industry. As a result, thousands of stores are highly reliant on CDK’s services to line up financing and insurance, manage inventory of vehicles and parts, and complete sales and repairs.

The car dealer Sonic Automotive Inc., which uses CDK to support critical dealership operations, said disruptions caused by the cyberattack are likely to have a “negative impact” on its operations until its systems have recovered, according to a Friday filing. Sonic hasn’t determined if the attack will have a material impact on its finances, and it has reopened all of its dealerships with workaround solutions to limit disruption, the company said.

CDK’s parent, Brookfield Business Partners LP, had its worst trading day since October — plunging 5.7% on Thursday — and extended its decline Friday. Shares in dealer groups AutoNation Inc., Group 1 Automotive Inc. and Sonic Automotive Inc. also slumped.

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