What is the State of the Automotive Business?
If you are interested in pursuing automotive business franchises opportunities, then you are probably interested in the current state of the automotive business. And not just the current state of the automotive business, but also the predictions for the near future of the automotive business. The automotive business is enormous. Clearly there’s a lot of money involved, and that’s attractive to people interested in automotive business franchise opportunities. But the size of the business also makes it difficult to find the right facts within this huge business that suggest if you should or should not enter the automotive business yourself. Just what is the state of the automotive business?
In 2018, over 17 million vehicles were sold in the United States alone. That is an increase of about two million from the 2013 figures, so vehicle sales are increasing. Correlating with that, there are now more vehicles on America’s roads than ever before; over 300 million as of 2016. And this makes sense, because there are more Americans than ever before, and while not every American owns a vehicle, many Americans do, so as population increases, the number of vehicles also tends to increase. But not all Americans can afford to (or want to) buy a brand-new vehicle.
The typical American vehicle is older now than it has ever been. An average age of 11.5 years old was reported by USA Today in 2015. There are several factors that contribute to this, including Americans wanting to save money by driving their vehicles for longer and the durability of said vehicles increasing. The main takeaway for automotive business franchises is that older vehicles require more repairs and more maintenance than do newer vehicles.
The Automotive Aftermarket
The automotive aftermarket is the compilation of all transactions that involve a vehicle after that vehicle’s initial sale to the general public. As such, the automotive aftermarket includes all business conducted by automotive business franchises such as automotive repair and tire repair franchises. The global automotive aftermarket currently has a value of over $900 billion. In the United States alone, the demand for automotive aftermarket parts hit $55.8 billion in 2016.
If we can glean nothing else from the figures listed above, we can be certain that there is a lot of money in the automotive business. And that means there is a lot of money for automotive business franchises. But what opportunities does the automotive business hold for the future? Is the automotive business growing or shrinking?
The automotive business is predicted to continue its steady growth. The automotive aftermarket is forecasted to have a global value of over $720 billion by 2020, $1 trillion by 2022, and $1.36 trillion by 2030. These are staggering figures. And while the shift towards electric and hybrid vehicles poses challenges and opportunities for auto manufacturers, there’s no reason it should hinder the revenues of automotive business franchises such as auto repair franchises. Most of the parts are still the same in all these vehicles and automotive business franchises will have lots of opportunities to accommodate both internal combustion and electric vehicles going forward.
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