What is car dealership?

A Car dealership is a business in which new/ old cars are sold at retail. This business is based on a dealership contract. The contract is between the automaker and the sales subsidiary. Car dealership involves maintenance of cars. There are numerous old and new cars for sale. They require proper maintenance. The retail dealer looks after these cars. For serving his needs, he recruits automobile mechanics. An automobile salesperson is required to sell the new/ old cars. The car dealer has a wide stock of spare parts of cars. Car dealerships in different countries are mentioned below:

Car dealership in United States: In the United States and Canada, a car dealer sells old as well as new cars. The former kind of car dealership is associated with old cars. The car dealer collects cars from various manufacturing companies. He usually collects the old and worn out cars which have not been sold. Then he polishes them and repairs the different parts if necessary. The car is then ready for sale. The new car dealers have contract with one or two manufacturers. They only have brand new cars for sale. The new cars are sold at a higher price than the old ones.

Car dealership in China: In China, the authorized car dealerships are also known as 4S car shops. 4S means sale, spare parts, service and survey. The new cars in China have a high market demand. In China, people earn a lot of money through car dealership. The profits of a car dealer in China are quite high. Sometimes it is 10% of the total cost. The percentage may vary; it may go up a little bit or even fall by one or two percent.

The method of transaction in China is not transparent. The amount which is mentioned in the price-tag is usually the reduced amount; the car actually costs much more. The extra amount is paid in black money.

Car dealership in Europe: In the European countries, there is a network of distributors. These distributors have a collection of spare car parts and motor vehicles, which are supplied to them by various companies. These distributors in Europe are also known as dealers.

Car dealership has become a profitable business. A car dealer makes a huge amount of profit by selling a new/ old car. Since people go for two/ four wheelers when they have a good bank balance, a car dealer can expect to generate good business.