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Automotive aftermarket revs up

The automotive world has been one of the most volatile markets across the franchise industry since the economy began its long decline.

A number of factors, including the recession and the once-soaring price of oil, have meant that new car sales have tanked over the last six months. People are no longer splurging on automobiles, as evidenced by the 30 per cent plunge in new automobile sales in the US in December.

We’ve discussed the advantages in automotive afterlife market in the past, and as the dust begins to clear on the autumn’s financial collapse, other economic analysts are coming on board to agree with us.

"People aren't buying new cars, so they're fixing up their old cars," Michael Souers, an aftermarket analyst at Standard & Poor's, told Investor’s Business Daily in a recent interview.

Souers explains that as the new car market dries up, consumers are relying more and more on afterlife retailers who can provide tune-ups and repairs to keep an older car on the road. And as new car sales continue to plummet, more dealerships will be forced to close down and afterlife retailers will become even more essential.

He also identifies a generational shift, stating that as people become less and less knowledgeable about car repairs, they become increasingly reliant on afterlife franchises to keep their cars running.

Of course, the success of an automotive franchise can depend on a number of intangibles, including geography. As well, there is always the risk that the economic crisis becomes so entrenched that drivers don’t even take their cars out of the driveway. But the numbers don't lie and automotive franchises still present an interesting opportunity for people looking to get their dreams of running a franchise business on the road.

As ever, Franchise Direct brings you the best automotive franchise opportunities on the market.

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