Choosing the Right Location for Your Car Dealership in Australia

17 Jun 2024 Helpful Tips

dealer location 

One of the most important factors that will determine if a dealership is successful or not is location. To increase your dealerships chance of success you need to choose a location that is easily accessible, sizable and most importantly has strong organic visibility.

That brings us to the question, how can you choose the best location for your dealership? EasyCars has put together a guide to help you understand the factors that you need to know and consider, to choose the best location for your car dealership in Australia.

Let’s get into it!

Understanding the Importance of Location

The location of your car dealership in Australia is important for 4 main reasons:

  • Customer Accessibility: A convenient dealership location in Australia can and will attract more potential buyers than locations that are difficult to get to.
  • Visibility: High visibility dealership locations will increase brand awareness and lead to spontaneous visits by potential car buyers.
  • Competition: Having a location that is close to your competitors can either benefit or hinder your dealerships success.
  • Operational Efficiency: A well-chosen dealership location will simplify operations and logistics for example when you have new cars delivered to sell.

Key Considerations for Choosing a Dealership Location

1. Demographic Analysis

The key to having a successful dealership is understanding your target customer demographics, and positioning yourself as close to them as possible. Before choosing a location, consider the following:

  • Population Density: Higher population suburbs like Parramatta or Melbourne can lead to more potential car buyers.
  • Income Levels: Look at the average income of residents in your intended dealership location.
  • Age Distribution: Different age groups will have differing vehicle choices, For example younger Australians may want a much different car than elderly Australians.

2. Market Demand

The second most important factor you need to consider before choosing a location for your car dealership is to do market research to know and understand the demand for cars in the area. Look at things like:

  • Vehicle Ownership Rates: Suburbs with high vehicle ownership rates might be a tougher sell, while suburbs with a lower car ownership rate could lead to growth opportunities.
  • Vehicle Preferences: Depending on where your dealership is located in Australia, customer vehicle preferences will vary. For example, rural towns may favour larger vehicle types like SUVs and 4x4 Utes whereas Metro locations vehicles like hatchbacks and electric cars may have a higher demand.

3. Competition Analysis

The Australian Automotive Industry is extremely competitive. To increase your chances of success it is essential that you analyse your competitive landscape:

  • Number of Competitors: Too many dealerships in one suburb can lead to intense competition, but being near competitors can also attract more customers due to the convenience of comparison shopping. It’s important to try to find a happy medium.
  • Competitor Performance: Try to gage the success metrics of used car dealerships close to your intended location. This will help you track if the location is viable or not.

4. Accessibility and Traffic

Your dealership MUST be easily accessible and visible to potential customers:

  • Major Roads and Highways: Having a dealership location that is close to major roads and highways can ensure high visibility.
  • Public Transportation: Having a dealership location that is close to public transport is a huge advantage.
  • Parking Facilities: Your car dealership will need to have ample parking for customer convenience.

5. Site Characteristics

It is important that your dealership has the appropriate site characteristics needed to buy and sell cars:

  • Size and Layout: Ensure your dealerships location is large enough for your car inventory, office, and customer parking.
  • Visibility: Following on from the last point, it is always recommended to choose a location that has high visibility from main roads.
  • Zoning Regulations: This point is very important. Be sure to check local zoning laws to ensure your intended dealership location is approved for commercial use as a car dealership.

6. Economic Factors

Believe it or not economic factors have a huge impact on your choice of location, it is important to look at:

  • Local Economy: A thriving local economy will mean higher disposable income for potential vehicle sales.
  • Property Costs: Rental costs of a dealership location will vary based on suburb and demand.

7. Future Development Plans

One of the biggest forward thinking factors that you should consider before choosing a location is future development plans like:

  • Infrastructure Projects: Are there any upcoming infrastructure developments close to your intended dealership site? Future development could lead to better long-term opportunities.
  • Commercial Developments: New residential areas, or business hubs can increase customer traffic.

Steps to Choosing the Right Location for your Car Dealership

1. Conduct Thorough Research

Start by collecting data on potential dealership locations in areas that you are looking to trade from. Look at things like the average rent in the area, the population breakdown, average income and most importantly how many competitors are in close proximity.

2. Visit Potential Sites

Never choose a location sight unseen. Make sure that you conduct site visits to get a feel for the location and to ensure that it meets the requirements of a car dealership.

3. Engage with Local Authorities

Speak with local authorities to confirm that the location is zoned for commercial purposes including operating a car dealership.

4. Evaluate Financial Implications

This will make or break your choice. Be sure to evaluate key financial implications like:

  • Property Costs: Compare if it is cheaper in the long term to purchase or lease your dealership location.
  • Operational Costs: Understand your ongoing costs like utilities, taxes, and maintenance costs.
  • Potential Revenue: Estimate how many cars that you will sell each month trading from that location based on research and comparable businesses.

5. Consult Industry Experts

To find the best location it is important to consult with industry experts like real estate agents and automotive consultants that have been through the process of setting up a car dealership in Australia. Expert advice can help you make the best-informed decision.

6. Consider Customer Perspective

This is one of the most important factors that you need to consider before choosing a dealership location. Put yourself in your intended customers shoes, see if the location is convenient, accessible and visible.

7. Finalise and Negotiate

Once you’ve identified the ideal location, of your car dealership, negotiate the best possible terms.

Final Word,

The key to having a successful car dealership in Australia is having a good location that is visible and easily accessible to customers. The tips presented are a few proven tips to help you on your search for a car dealership location.

DISCLAIMER – The content within this blog does not constitute professional advice and is intended to be general in nature. Please consult with all relevant parties prior to making any decision.

We hope you enjoyed reading this article. To read more articles like this, please visit the EasyCars latest news page here.

About EasyCars,

EasyCars by Jeal is an Australian, web-based, dealer management system that automates the buying and selling of motor vehicles. Using the latest technologies, EasyCars removes frustrations experienced at the dealership and opens your doors for greater growth.

EasyCars features include Simple Stock Management, Automated Advertising, Integrated Accounting, Government Compliance, Business Reporting, Facebook Automotive Inventory Ads, Reviews Management, Dealership Websites and more.

To learn more about EasyCars Dealer Management System or to arrange a no-obligation free demo, contact us today on 1300 473 744 or submit the form below.

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