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Pedal to the floor: the advantages of an automotive franchise

There no point in trying to gloss over the stark financial reality of the moment: everyone is feeling the economic pinch. Consumer confidence is low and banks have been forced to tighten their belts. For automotive franchises, the economic crisis couldn’t have come at a worse time. The skyrocketing price of oil in the last year has forced American drivers to deal with the reality that most drivers around the world have long accepted. With gas looking like it might reach $5 a gallon, the days of cheap driving seem like it might be over.

The statistics make for tough reading for those in the automotive industry. Americans bought 13.6 million new cars in May, which was down 18 percent from the same period in 2007. This was the biggest plunge since October, 2002, which itself proceeded a year of huge car sales. Data also shows that drivers are also holding onto their cars longer.

All and all, it doesn’t seem like the most appetizing time to consider purchasing an automotive franchise. But if one looks deeper into the numbers, they can find reasons to be optimistic.

For one, as the automotive industry endures turbulence, it will be the company with the least amount of exposure that will survive. Many companies, for example, have over-invested in niche accessories that are now surplus to the requirements of today’s frugal drivers. At the same time, as people hold onto their cars longer, they will certainly require further repair work. And as the industry becomes more cutthroat, it will probably be independent businesses that fall by the wayside. In short, the tried-and-true business models of franchises might be the ideal businesses to see you through this rocky economic period.

Obviously, it takes a courageous investor to wade into the uncertain economic waters. But an afterlife automotive franchise with Franchise Direct still offers an interesting opportunity.

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