The business opportunities in the automotive industry are seemingly endless. The most recent data published by the business research company, IBISWorld, shows a projected growth for the business to between $865 billion and $934 billion in 2020. This growth not only includes car manufacturing but also tire sales, gas stations, auto parts stores, and more. Entrepreneurs who have a passion for this industry can make money doing just about anything from designing cars to selling tires or even providing financing for their customers’ new vehicles!
The automotive industry is a multi-billion dollar market that is growing every year. However, many people are unaware of the business opportunities that exist in this industry. If you want to start a business in the automotive industry, there are three main areas where entrepreneurs can focus their efforts: manufacturing, retail, and marketing services.
Each one of these areas offers unique opportunities for entrepreneurs looking to enter this lucrative market. Manufacturing involves creating vehicles or parts for sale to auto dealerships or car manufacturers. Retail includes selling new or used cars through local dealerships or online sales platforms. Marketing services include companies that help with advertising campaigns for auto companies such as Ford, Kia Motors America, Hyundai Motor Group America, and General Motors.
Each business opportunity has its own set of pros and cons that entrepreneurs should research before entering into one or more sectors within this industry. This way, entrepreneurs will not face major challenges that could lead to major setbacks down the line.
Automotive Industry Opportunities
Manufacturing pertains to the process of converting raw materials into goods that are ready for use. This business opportunity is very desirable because it allows entrepreneurs to make anything from cars, airplane parts, and any other type of manufactured good.
The pros of the manufacturing area include the following:
– There is a high demand for manufactured goods, so business owners will not have difficulty finding people to buy their products.
– This business opportunity has the ability to provide entrepreneurs with capital to start manufacturing without being forced into debt.
The cons of this area include:
– Businesses that manufacture are often heavily regulated.
– A large investment is needed to start a business related to manufacturing products for the automotive industry.
– Manufacturing businesses have high overhead costs and need to have plenty of capital on hand to be successful.
Retail pertains to businesses that sell products and will have a business model or strategy based on their products. The pros of starting a retail business in the automotive industry include the following:
– Retail businesses have low overhead costs.
– Retail businesses are relatively easy to start, and the business model is fairly simple, making it a good starting point for entrepreneurs that don’t know much about business models yet.
– Retail businesses have an extensive reach, which means that there are many opportunities for business growth in this industry. For example, an auto repair shop can branch out and offer extra services such as car-wrapping services to earn more money.
– There’s a lot of room for business expansion within the retail area because it is so diverse from one another (i.e., stores).
The cons of this area include:
– A retail business in the automotive industry will generally be based on products from other companies, which means that business owners will need to find the right suppliers.
– The business model is relatively fixed, limiting how much entrepreneurs can adjust it to their needs.
– The business model is slow-moving.
– Retailers are often at the mercy of the economy, which means that business owners could risk losing their businesses if there’s a recession or economic downturn.
3) Marketing services
Marketing services in the automotive industry are closely related to advertising and promotion. The business model can vary from business to business, but there’s usually a common theme of working with other companies rather than generating products yourself. Entrepreneurs who choose this business model need to understand marketing or be willing to learn as they go.
The pros of this business area include the following:
– Entrepreneurs can be a jack of all trades and start with this business model before branching out into other areas.
– It doesn’t require a large capital investment, which means that business owners don’t need to have the same level of risk tolerance as they would for businesses in other sectors such as manufacturing or transportation.
The cons of this business area include the following:
– Entrepreneurs in this business model need to have a business plan that includes a name, logo, and other branding material.
– Entrepreneurial owners are the only employees of their business, so they might not be able to take vacation time or sick days without impacting their business.
– The product must prove itself worthy of consumers’ attention before earning any money.
Taking Advantage of Opportunities
The automobile industry can be very lucrative because of the range of business opportunities in this industry. If entrepreneurs maximize these opportunities properly, there is no doubt that they will find business success. After all, the automotive industry is one of the biggest industries in the world.