Car dealership

Typical car dealership selling used cars outside, new cars in the showroom, as well as a vehicle entrance to the parts and service area in the back of the building.
Service and repair entrance
Auto dealer's service and repair facility

A car dealership or vehicle local distribution is a business that sells new and/or used cars at the retail level, based on a dealership contract with an automaker or its sales subsidiary. It employs automobile salespeople to do the selling. It may also provide maintenance services for cars, thus employing automobile mechanics, stock and sell spare automobile parts, and process warranty claims.


By continent

Musa Aliyu Motors Nig. L.t.d.



In China, an authorized car dealership is called 4S car shops. The 4S represents Sale, Sparepart, Service and Survey.


In most cases, brand-name new cars can be purchased only from 4S shops. For new cars in high demand, a premium is sometimes added for instant delivery or just placing an order. Likewise, cars with high supply are often discounted.[1]

The profit of car dealers in China is quite high compared to the rest of the world, in most cases 10%.[citation needed] This is due to the non-transparent invoice price as announced by manufacturers and to the premiums they charge for quick delivery. Due to the lack of knowledge for most customers, dealers can sell add-ons at much higher prices than the aftermarket.[citation needed]



Audi dealership in Dresden, Germany
a Lamborghini Showroom on Rush Street in Chicago.

This field is ruled by Commission Regulation (EC) NO 1400/2002 of 31 July 2002, on the application of article 81(3) of the Treaty to categories of vertical agreements and concerted practices in the motor vehicle sector.

In the Member States of the European Union, motor vehicle and spare part manufacturers distribute their products through networks of distributors. As far as motor vehicles are concerned, these distributors are commonly known as dealers. Motor vehicle manufacturers and other undertakings also operate networks of authorised repairers. Such a distribution or repair network consists of a bundle of similar agreements between the manufacturer and the individual distributors or body shops. For the purposes of EU competition law, these agreements are referred to as vertical agreements, as the manufacturer and distributor or repairer each operate at different levels of the production or distribution chain.

Whether a vertical agreement actually restricts competition and whether in that case the benefits outweigh the anti-competitive effects will often depend on the market structure.

The new Regulation 1400/2002, which entered into force on 1 October 2002, introduces a number of substantial changes[specify] as regards the exemption of distribution agreements for new motor vehicles and spare parts. It also introduces major changes[specify] as regards the exemption of agreements for the provision of repair and maintenance services by authorised and independent repairers and other independent operators, such as onroad assistance operators, distributors of spare parts and providers of training for repairers.

North America

  • Car dealerships in North America

South America

In Peru the profit of the dealers averages between 11%- 13%. However, annual new vehicle sales average no more than 90,000 units.

Auto Transport

Auto Transport is used to move the vehicle from the factory to the dealerships. This includes country to country shipping as well as state to state shipping. Auto shipping and transport was largely a commercial activity conducted by dealers, manufacturers and brokers until the last ten to fifteen years. The explosion of Internet use has allowed this niche service to grow and reach the general consumer marketplace. This car shipping industry has grown explosively since the advent of the Internet. People are now able to purchase cars from anywhere in the world and have them shipped to their doorstep.

See also


  • Genat, Robert (2004). The American Car Dealership. Motorbooks International. ISBN 0-76031-934-0. 

External links

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