Automotive franchises running well while manufacturing industry suffers

Automotive franchises running well while manufacturing industry suffers

This is a difficult phase for the US automotive industry, but automotive franchises are doing well nonetheless.

The distressing problems in the US car industry are common knowledge. The US auto industry is in deep financial crisis.  In recent cars the big three auto manufacturers GM, Ford and Chrysler, have been struggling to stay afloat with collapsing sales, plunging share prices, steep losses in their operations and depleted cash reserves.  The credit crunch delivered a double whammy. Car manufacturers cannot get credit to finish their restructuring while lenders refuse to fund car loans to enable buyers to purchase new automobiles.

But Franchise Direct has learned that the grave crisis in the automotive industry, coinciding with America’s worst recession since the 1930s, has actually created genuine opportunities for aftermarket and car rental and sales franchises.

The reality is Americans aren't buying new cars as readily as they once did. Franchise Direct learned that projected new car sales for 2009 are 9.7 million units. This represents a 40% decline since 2007. But America’s love affair with the automobile is undiminished. Because of the recession, more drivers are becoming reliant on services provided by automotive franchises as they need to get more use out of their vehicle.

Aftermarket automotive franchises are most likely to prosper from this development, as consumers seek necessary maintenance more regularly. They will probably rely on a company with a reliable reputation.  Used car and rental franchises will also thrive from this sudden thriftiness.

Exciting new side markets are also forming for franchised businesses to exploit. In recent years, drivers have favored vehicles with elaborate technology. This might mean evolved engine control, microprocessors and advanced safety and music equipment. There has also been a switch to ‘green’ technology in automotive manufacturing. With these technologies becoming incredibly prevalent, a new franchise sector is emerging to cater to this need. Drivers now lack the skill to do such intricate automotive work and rather turning to trusted franchise brands.

Also, Franchise Direct recently conducted a study where they studied the Franchise Disclosure Documents (FDD’s) of 30 automotive franchises and found that more car owners are turning to franchises to keep their car functioning. So the bottom line for franchises focused on the car industry is good. The surging price of cars versus income means that consumers will spend extra on auto maintenance and reconditioning to help retain the state of their vehicles. The growing demand for navigation systems, car safety systems and entertainment and systems has also allowed for growing niche markets for auto franchises.

Franchising works because it allows entrepreneurs to work for themselves, but not by themselves. With an automotive franchise, you’ll be working with a franchise with a proven brand name and a trusted reputation. Franchising will set your dreams of owning a small business and put them in motion.

It is ironic that the economic downturn and the crisis in America’s car industry have engineered the conditions for the recent success of automotive franchises. America’s passion for the automobile is still strong, but American thoughts towards car buying have radically changed. Franchise Direct’s research shows that drivers are turning to automotive franchises to keep their cars functioning. With Congress's recovery plan providing some economic activity, Franchise Direct believes that this is a top time to consider franchise opportunities in the automotive sector.