A
car dealership or vehicle local distribution is a business that sells new or used cars at the
retailRetail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
level, based on a dealership contract with an
automakerThe automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the world's most important economic sectors by revenue....
or its sales
subsidiaryA subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
. It employs automobile salespeople to do the selling. It may also provide maintenance
servicesA motor vehicle service is a series of maintenance procedures carried out at a set time interval or after the vehicle has travelled a certain distance...
for cars, thus employing automobile mechanics, stock and sell spare automobile parts, and process
warrantyIn business and legal transactions, a warranty is an assurance by one party to the other party that specific facts or conditions are true or will happen; the other party is permitted to rely on that assurance and seek some type of remedy if it is not true or followed.In real estate transactions, a...
claims.
China
In China, an authorized car dealership is called 4S car shops. The 4S represents Sale, Sparepart, Service and Survey.
整车销售(Sale)、零配件(Sparepart)、售后服务(Service)、信息反馈(Survey).
In most cases, brand-name new cars can be purchased only from 4S shops. For new cars in high demand, a premium is sometimes added for instant delivery or just placing an order. Likewise, cars with high supply are often discounted.
The profit of car dealers in
ChinaChinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
is quite high compared to the rest of the world, in most cases 10%. This is due to the non-transparent invoice price as announced by manufacturers and to the premiums they charge for quick delivery. Due to the lack of knowledge for most customers, dealers can sell add-ons at much higher prices than the aftermarket.
Europe
This field is ruled by
Commission RegulationA regulation is a legislative act of the European Union that becomes immediately enforceable as law in all member states simultaneously. Regulations can be distinguished from directives which, at least in principle, need to be transposed into national law...
(EC) NO 1400/2002 of 31 July 2002, on the application of article 81(3) of the Treaty to categories of vertical agreements and concerted practices in the
motor vehicleA motor vehicle or road vehicle is a self-propelled wheeled vehicle that does not operate on rails, such as trains or trolleys. The vehicle propulsion is provided by an engine or motor, usually by an internal combustion engine, or an electric motor, or some combination of the two, such as hybrid...
sector.
In the Member States of the European Union, motor vehicle and
spare partSpare Parts may also refer to:* Spare Parts , by Status Quo* Spare Parts is a Doctor Who audio drama.* Spare Parts , by Servotron* "Spare Parts" , by Bruce Springsteen* "Spare Parts"...
manufacturers distribute their products through networks of distributors. As far as motor vehicles are concerned, these distributors are commonly known as dealers. Motor vehicle manufacturers and other undertakings also operate networks of authorised repairers. Such a distribution or repair network consists of a bundle of similar agreements between the manufacturer and the individual distributors or body shops. For the purposes of EU competition law, these agreements are referred to as
vertical agreementA vertical agreement is a term used in competition law to denote agreements between firms at different levels of the supply chain. For instance, a manufacturer of consumer electronics might have a vertical agreement with a retailer according to which the latter would promote their products in...
s, as the manufacturer and distributor or repairer each operate at different levels of the production or distribution chain.
Whether a vertical agreement actually restricts competition and whether in that case the benefits outweigh the anti-competitive effects will often depend on the market structure.
The new Regulation 1400/2002, which entered into force on 1 October 2002, introduces a number of substantial changes as regards the exemption of distribution agreements for new motor vehicles and spare parts. It also introduces major changes as regards the exemption of agreements for the provision of repair and maintenance services by authorised and independent repairers and other independent operators, such as onroad assistance operators, distributors of spare parts and providers of training for repairers.
South America
In Peru the profit of the dealers averages between 11%- 13%. However, annual new vehicle sales average no more than 90,000 units.
Auto Transport
Auto Transport is used to move the vehicle from the factory to the dealerships. This includes country to country shipping as well as state to state shipping. Auto shipping and transport was largely a commercial activity conducted by dealers, manufacturers and brokers until the last ten to fifteen years. The explosion of
InternetThe Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
use has allowed this niche service to grow and reach the general consumer marketplace. This car shipping industry has grown explosively since the advent of the Internet. People are now able to purchase cars from anywhere in the world and have them shipped to their doorstep.
See also
- Auto auction
- AutoBidsOnline
AutoBidsOnline is a research portal and online car buying site based in Dallas, Texas. It allows consumers to research new car prices, compare new cars for sale and bid for the price of their new car online...
- Automaker
The automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the world's most important economic sectors by revenue....
- Carfax
Carfax, Inc. is a commercial web-based service that supplies vehicle history reports to individuals and businesses on used cars and light trucks for the American and Canadian marketplaces.-History:...
- Federation of Automobile Dealers Associations of India (FADA)
- Kelley Blue Book
Kelley Blue Book, headquartered in Irvine, California, is the United States' largest automotive vehicle valuation company. The company's website is a source for new and used vehicle pricing and information...
- National Automobile Dealers Association
The National Automobile Dealers Association, founded in 1917, represents nearly 17,000 new-car and truck dealers, both domestic and international, with about 37,500 separate franchises...
- Presidential Task Force on the Auto Industry
The Presidential Task Force on the Auto Industry is an ad hoc group of United States cabinet-level and other officials that was formed to deal with the financial bail out of automakers Chrysler Corporation and General Motors....
- Showroom
The word showroom has two distinct meanings including:-Marketing location:A showroom is a large space used to display products for sale, such as automobiles, furniture, appliances, carpet or apparel. The World's most famous locations for a showroom are the Champs Elysees in Paris or the 5th Avenue...
- Used car
External links