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A car dealership, or vehicle local distribution, is a business that sells new or
used car A used car, a pre-owned vehicle, or a secondhand car, is a vehicle that has previously had one or more retail Retail is the sale of goods In economics Economics () is the social science that studies how people interact with value ...
s at the
retail Retail is the sale of goods In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption ( ...

retail
level, based on a dealership contract with an
automaker The automotive industry comprises a wide range of companies A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mixture of bo ...
or its sales
subsidiary A subsidiary, subsidiary company or daughter company is a company (law), company owned or controlled by another company, which is called the parent company or holding company. Two subsidiaries that belong to the same parent company are called sis ...
. It can also carry a variety of Certified Pre-Owned vehicles. It employs automobile salespeople to sell their automotive vehicles. It may also provide maintenance
services Service may refer to: Activities :''(See the Religion section for religious activities)'' * Administrative service, a required part of the workload of Faculty (academic staff), university faculty * Civil service, the body of employees of a governm ...
for cars, and employ automotive technicians to stock and sell spare
automobile parts This is a list of automotive parts, mostly for vehicles using internal combustion engines which are manufacturing, manufactured components of automobiles: Car body and main part Body components, including trim Vehicle door, Doors Window ...

automobile parts
and process
warranty In contract A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted with DXO PhotoLa ...
claims.


History of car dealerships in the United States

The early cars were sold by automakers to customers directly or through a variety of channels, including mail order, department stores, and traveling representatives. The first dealership in the United States was established in 1898 by William E. Metzger. Today, direct sales by an automaker to consumers are limited by most states in the U.S. through franchise laws that require new cars to be sold only by licensed and bonded, independently owned dealerships. The first woman car dealer in the United States was Rachel "Mommy" Krouse who in 1903 opened her business, Krouse Motor Car Company, in
Philadelphia Philadelphia (colloquially known simply as Philly) is the largest city in the Commonwealth A commonwealth is a traditional English term for a political community founded for the common good In philosophy Philosophy (from , ) is ...

Philadelphia
,
Pennsylvania Pennsylvania ( , elsewhere ; pdc, Pennsilfaani), officially the Commonwealth of Pennsylvania, is a landlocked A landlocked country is a country that does not have territory connected to an ocean or whose coastlines lie on endorheic basi ...

Pennsylvania
. Car dealerships are usually franchised to sell and service vehicles by specific companies. They are often located on properties offering enough room to have buildings housing a showroom, mechanical service, and body repair facilities, as well as to provide storage for used and new vehicles. Many dealerships are located out of town or on the edge of town centers. An example of a traditional single proprietorship car dealership was Collier Motors in North Carolina. Many modern dealerships are now part of corporate-owned chains such as
AutoNation AutoNation is an American automotive retailer based in Fort Lauderdale which provides new and pre-owned vehicles and associated services in the United States. The company was founded by Wayne Huizenga Harry Wayne Huizenga Sr. (; December 29, 1 ...
with over 300 franchises. Dealership profits in the US mainly come from servicing, some from
used car A used car, a pre-owned vehicle, or a secondhand car, is a vehicle that has previously had one or more retail Retail is the sale of goods In economics Economics () is the social science that studies how people interact with value ...
s, and little from new cars. Most automotive manufacturers have shifted the focus of their franchised retailers to branding and technology. New or refurbished facilities are required to have a standard look for its dealerships and have product experts to liaise with customers.
Audi Audi AG () is a Germany, German automobile manufacturer that designs, engineers, produces, markets and distributes luxury vehicles. Audi is a wholly owned subsidiary of the Volkswagen Group and has its roots at Ingolstadt, Bavaria, Germany. Aud ...

Audi
has experimented with a hi-tech showroom that allows customers to configure and experience cars on 1:1 scale digital screens. In markets where it is permitted,
Mercedes-Benz Mercedes-Benz (), commonly referred to as just Mercedes, is a German luxury automotive marque A brand is a name, term, design, symbol or any other feature that identifies one seller's good or service as distinct from those of other sell ...

Mercedes-Benz
opened city centre brand stores.
Tesla Motors Tesla, Inc. ( or ) is an American electric vehicle An electric vehicle (EV) is a vehicle A vehicle (from la, vehiculum) is a machine that transport Transport (commonly used in the U.K.), or transportation (used in the U.S. ...

Tesla Motors
has rejected the dealership sales model based on the idea that dealerships do not properly explain the advantages of their cars, and they could not rely on third party dealerships to handle their sales. However, in the United States, direct manufacturer auto sales are prohibited in almost every state by franchise laws requiring that new cars be sold only by dealers. In response, Tesla has opened city centre galleries where prospective customers can view cars that can only be ordered online. These stores were inspired by the
Apple Store Apple Store is a chain of retail storesThe retail format (also known as the retail formula) influences the consumer's store choice and addresses the consumer's expectations. At its most basic level, a retail format is a simple marketplace, that ...

Apple Store
s. Tesla's model was the first of its kind, and has given them unique advantages as a new car company.


Dispute

Multiple studies have shown that franchises increase car costs by nearly 10%. Additionally, the issuance of new dealership licenses is subject to geographical restriction; if there is already a dealership for a company in an area, no one else can open one. This has led to dealerships becoming in essence hereditary, with families running dealerships in an area since the original issuance of their license with no fear of competition or any need to prove qualification or consumer benefit (beyond proving they meet minimum legal standards), as franchises in most jurisdictions can only be withdrawn for illegal activity and no other reason. This has led to consumer campaigns for establishment or reform, which have been met by huge lobbying efforts by franchise holders. New companies trying to enter the market, such as Tesla, have been restricted by this model and have either been forced out or been forced to work around the franchise model, facing constant legal pressure.


Multibrand car dealers

Multibrand and multimaker car dealers sell cars from different and independent carmakers. Some are specialized in
electric vehicles An electric vehicle (EV) is a vehicle that uses one or more traction motor, electric motors for propulsion. It can be powered by a Current collector, collector system, with electricity from extravehicular sources, or it can be powered autonomous ...
.


Auto transport

Auto transport is used to move vehicles from the factory to the dealerships. This includes international and domestic shipping. It was largely a commercial activity conducted by manufacturers, dealers, and brokers.
Internet The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a ''internetworking, network of networks'' that consist ...

Internet
use has encouraged this niche service to expand and reach the general consumer marketplace.


See also

*
Auto auction Auto auctions are a method of selling vehicles based on an auction An auction is usually a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder or buying the ...
*
Auto row An auto row or auto mall is a business cluster with multiple car dealerships in a single neighborhood or road. Auto rows are distinct from car supermarkets which are a single, large dealership. Economics Auto rows, like mall food courts, are an ex ...
*
Automaker The automotive industry comprises a wide range of companies A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mixture of bo ...
*
List of auto dealership and repair shop buildings A number of auto dealership, auto service, and auto repair shop buildings are notable. A number of these are listed on historic registers, including some in the United States whose notability is documented by their listing the National Register o ...
*
Showroom file:Living model in plumbing fixtures Photo V (HS85-10-38529) (cropped).jpg, A plumbing fixture showroom, Canada, 1921 A showroom is a large space used to display products or show entertainment. Marketing location Image:Concesionario de Mercedes- ...

Showroom
*
Used car A used car, a pre-owned vehicle, or a secondhand car, is a vehicle that has previously had one or more retail Retail is the sale of goods In economics Economics () is the social science that studies how people interact with value ...


Organizations

* AutoBidsOnline * Carfax *
Kelley Blue Book Kelley Blue Book is an Irvine, California California is a U.S. state, state in the Western United States. With over 39.3million residents across a total area of approximately , it is the List of states and territories of the United States b ...
* Federation of Automobile Dealers Associations of India (FADA) * National Automobile Dealers Association * Presidential Task Force on the Auto Industry


References


Further reading

*


External links


EU car dealership reforms
*