Are you looking to start a car dealership in Australia? One of the most popular and successful dealership models is partnering with a leading car manufacturer. Partnering with a leading car manufacturer in Australia allows you to sell new vehicles from that manufacturer, access exclusive car financing options, and most importantly increase your dealership’s credibility. However, getting a partnership with a car manufacturer is not an easy process.
EasyCars has put together the complete guide that walks you through the steps to setting up a dealership partnership with leading car manufacturers in Australia.
Let’s get into it!
1. Conduct Thorough Market Research
Before you consider approaching any car manufacturer in Australia, you will need to do market research. You need to understand what manufacturers offer partnerships, their unique process of partnering with local car dealerships in Australia and most importantly choosing the right manufacturer to partner with. Some of the key things that you need to research include:
- Identify Market Needs: What are the most popular cars in Australia? Identify what cars are in high demand in your local area. Are customers looking for SUVs for sale, sedans, electric cars, trucks?
- Analyse Competitors: The second most important factor that you need to research is the competitive landscape. Learn about your competition, understand their existing partnerships with car manufacturers and their agreements. Try to understand their strengths and weaknesses and figure out how you can differentiate your dealership from theirs.
- Understand Manufacturer Offerings: Research all local manufacturers that trade in Australia and sell cars that are in high demand. Understand each manufacturers product lineup, reputation and most importantly their partnership requirements.
2. Prepare a Detailed Business Plan
To partner with a car manufacturer you need to have a clear and concise plan. When you partner with a manufacturer their reputation is at stake as well. Manufacturers want to ensure that the dealerships that they partner with are credible and will accelerate their growth. Put together a strong and detailed business plan that outlines what you want to achieve and how you are going to achieve it. Your car dealership business plan should include:
- Executive Summary: An executive summary provides a complete overview of your dealership, including your mission and vision statement, your goals and your operational strategies.
- Market Analysis: This section of your car dealership business plan is vital. Highlight your market research findings. Outline the demand for specific vehicles in your car dealerships local area.
- Business Model: How is your dealership going to operate? In this section be sure to explain your dealerships business model including how you will sell cars for sale, your target market and key revenue streams.
- Financial Projections: Arguably the most important section of your business plan! In this section include your detailed financial projections. How many cars are you going to sell monthly, quarterly and yearly? Provide revenue and profitability estimates.
- Operational Plan: How will your dealership operate on a daily basis? In this section outline your dealerships operations, including your staffing needs, location and how you will manage car inventory.
- Marketing Strategy: How are you going to get customers to your dealership? Are you going to use car dealer digital marketing strategies? In this section outline your dealerships marketing strategy.
3. Select the Right Manufacturer
Once you have researched and understood the Australian automotive industry, and have a detailed car dealership business plan, the next step is to choose the right manufacturer to partner with. Consider the following factors when selecting a manufacturer:
- Brand Reputation: Partner with car manufacturers in Australia that have a long, proven and strong reputation. For example manufacturers like Toyota and Mazda have long been known for building strong and reliable vehicles.
- Product Lineup: This is where your market research is so important. Ensure that the manufacturer that you choose has a diverse car lineup that will allow you to capture the widest customer market.
- Support and Training: You can never under estimate the value of support. Look for car manufacturers that provide ongoing support and training for their Australian car dealership partners.
- Financial Stability: This point cannot be overstated. Be sure to choose a car manufacturer that has a stable financial position. The last thing that you want to do is build a partnership with a manufacturer that goes into administration.
- Partnership Requirements: Understand your chosen manufacturer’s partnership requirements, including minimum financial commitments, delivery options, price points and most importantly sales targets.
4. Approach the Manufacturer
Once you have chosen your ideal car manufacturer in Australia it is time to approach them with your business partnership proposal. Here’s how to make a compelling pitch to car manufacturers in Australia:
- Formal Proposal: Prepare a formal proposal for your chosen car manufacturer which outlines your dealerships plan, strengths, business plan and most importantly how entering into a partnership with your dealership will help grow their market share and revenue.
- Initial Contact: Never go straight to head office or contact through a support line. The best way to initiate contact with a car manufacturer in Australia is to reach out to the manufacturer’s regional or national sales manager to introduce yourself and express your interest in becoming a dealership partner.
- Presentation: If your selected manufacturer shows interest in your car dealerships proposal, schedule a meeting to present your proposal in detail. In this meeting showcase your research, plan and how partnering together will be advantageous to both companies.
- Negotiation: Each manufacturer will have their own terms and conditions. Be prepared to negotiate different terms and conditions that favour both parties. This can include negotiating car prices and sales targets.
5. Meet Facility and Staffing Requirements
Many car manufacturers whether it be Toyota, Hyundai, Mazda or any other typically have facility and staff requirements that all their partners must meet. Ensure your dealership complies with the following standards:
- Facility Standards: Many Car Manufacturers in Australia require partner dealerships to have specific dealership showroom sizes, service bays, customer areas and signage. Be sure to meet all manufacturer requirements.
- Staffing Requirements: Hire qualified staff, including car salespeople, service technicians, and administrative personnel that will allow you to meet and exceed set car sales tactics.
- Technology and Equipment: Most car manufacturers require connectivity with their partners systems to see live sales numbers and the like. Equip your dealership with the necessary technology and equipment, such as a dealer management software.
6. Secure Financing
When you partner with a leading car manufacturer in Australia you will need to have access to significant funds. To meet set requirements think about exploring the different financing options like:
- Bank Loans: The most used form of financing for all businesses in Australia is bank loans. If needed, apply for a business loan from a leading bank to cover the costs of setting up your car dealership partnership.
- Manufacturer Financing: Some car manufacturers do offer financing options to their dealership partners to help them grow, scale and meet sales targets. Manufacturer financing can include loans, lines of credit and even inventory financing.
- Investors: Another popular type of financing that many large car dealerships in Australia take advantage of is investors. Try to attract or approach investors who are willing to provide capital in exchange for a percentage stake in your dealership.
7. Finalise the Partnership Agreement
Once you and your chosen car manufacturer have agreed on the terms and conditions, finalise the partnership agreement and exchange contracts. This agreement should outline:
- Financial Commitments: Specify the financial obligations of both parties, including car inventory purchasing, location investments, and any dealership partnership fees.
- Sales Targets: Be sure to define and agree on sales targets and performance metrics that your dealership needs to meet.
- Support and Training: Make sure the agreement highlights the support and training programs that the car manufacturer will provide to your dealership and its staff.
- Termination Clauses: Include clauses outlining the conditions under which the partnership can be terminated by either party.
Final Word,
Setting up a dealership partnership with car manufacturers is a proven method for success in the highly competitive Australian automotive industry. The 7 steps presented in this piece are proven ways that your dealership can plan, approach, negotiate and finalise a partnership with a leading car manufacturer.
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.