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Franchise Direct sees bright prospects for automotive franchises despite problems in the industry

The automotive industry is cloaked in uncertainty, but according to the latest exclusive franchise study by Franchise Direct, there are many reasons to believe that automotive franchises will continue to thrive. Franchise Direct recently analyzed the Franchise Disclosure Documents (FDD’s) of 30 franchises and found a buoyant franchise sector in the middle of a stuttering industry. The endemic problems in America’s car industry have been well-documented. But Franchise Direct has found that the sharp decline of automotive industry, coinciding with America’s worst economic downturn since the Great Depression has actually created some exciting opportunities for aftermarket and car rental and sales franchises.

Car Sales

Part of the resurgence of automotive franchises is based on the fact that Americans are simply not buying cars at the moment. According to the Franchise Direct automotive franchise study, the projected new car sales for this year are 9.7 million units, a 40% decline since 2007. But Americans are reliant as ever on the automobile. The bottom line is that as people hold onto their cars longer, they are becoming more dependent on services provided by automotive franchises.

Obviously, aftermarket automotive franchises are best positioned to succeed, as consumers seek maintenance and repairs with greater urgency. Used car and rental franchises will also enjoy the benefits of this new reluctance to splurge on new automobiles.

Interestingly, the advance of technology in automobiles has created a new niche market for aftermarket franchises. Drivers have embraced cars with high-tech engine control, microprocessors and complicated safety and communications systems. American drivers are also demanding more eco-friendly cars that lower carbon emissions. As these technologies become more wide-spread, a new market will open for aftermarket franchises, as drivers will no longer be able to service their own careers.

The great irony is that the global recession and the collapse of Detroit’s auto industry has opened the door for the recent success of automotive franchises. America’s love affair with the automobile is undiminished, but American’s attitude towards car buying has radically changed. Franchise Direct’s research shows that consumers are turning towards automotive franchises to keep their cars on the road. With the government’s stimulus plan providing economic optimism, Franchise Direct feels that this is an excellent time to consider franchise opportunities in the automotive sector.

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