Automotive Franchise Opportunities

In Australia, there are almost as many cars as there are people, so it is unsurprising to see that there are also plenty of successful automotive franchises.

It is a country that loves its vehicles and that has led to plenty of savvy business people spotting gaps in the market where they can prosper.

Every year, a huge number of new vehicles arrive on Australia’s roads. For instance, in the first six months of 2022, over 430,000 new vehicles were sold in Australia, according to an automotive industry screenshot from Marklines.

Generally speaking, the automotive franchise industry is focused on the aftermarket of a car’s life-cycle. However, these new vehicles are new units that will require aftercare and thus, many of them could be future customers.

For those of you who don’t know what the ‘aftermarket of a car’s lifecycle’ means, the automotive aftermarket includes everything that happens after the first sale of an automobile.

This includes the repair and maintenance of the vehicle, as well as upgrades, valeting and much, much more. In Franchise Direct, we have listed franchises that focus on spraying cars, high quality wheels, as well top-notch valeting.

With such a varied market, it is unsurprising to see that there are so many Australians employed in the automotive industry. This is demonstrated by statistics from the Australian Industry and Skills Committee.

They have stated that the automotive industry employs over 350,000 people in Australia.

As you’ve probably guessed, repairs, servicing and parts takes up quite a large portion of this and with changing technology, this industry is moving and adapting every day.

Here are some facts and trends about the automotive industry in Australia

• The global automotive aftermarket industry The automotive aftermarket industry size was estimated to be around USD 560 billion in 2021. As we previously stated, most car franchises are focused in this area and thus, it could be an ideal time to invest in one of our franchise opportunities. Of course, there are technical franchises that require previous experience. However, there are also franchisors who are looking for business people to run their franchise, where no manual skills are required.
• There are over 35,000 people employed in the automotive body, paint and interior repair industry in the country. These include panel beaters, vehicle parts fitters, car detailers and vehicle painters. Over the past couple of decades, this is a part of the industry that has gone from strength-to-strength.
• The average age of a vehicle in Australia is just over 10 years old. Older cars means more money being spent on these used cars, which means, more money being spent at automotive franchises. Older cars require more maintenance and this demonstrates an obvious opportunity for those within the industry.
• From 2011 to 2021, approximately 40,000 fully electric cars were sold in Australia. More and more franchises are adapting to the future of automotive technology, which is a positive thing. The adaptation to EVs represents a huge opportunity for businesses who recognise the changing market place.

Industry experts have stated that the key factors to success in Australia’s automotive industry include economies of scale and an ability to quickly adopt new technology.

On the subject of skills, although done in 2019, the Automotive IRC’s Skills Forecast still holds relevance.

It identified significant skills demand in the industry for the following:

• Fault diagnosis skills.
• Mechanical and electrical repair skills for modern vehicle systems.

The second point is key here, as an ability to react to future demand has always been integral to prospering within the automotive industry.

The Automotive IRC’s Skills Forecast also identified three key drivers that will change the industry going into the future.

They are the evolving economic environment, changing technology and shifting consumer preferences.

Of course, planning for the future isn’t always easy. However, there are definitely reasons for optimism within this industry.

Stuart Charity from the Australian Automotive Aftermarket Association discussed reasons for positivity around the automotive aftermarket industry in a wide-ranging interview with Auto Parts Asia Magazine.

He said: “We are very positive about the growth outlook in the aftermarket over the next 5 year as all the key drivers that we look at to assess future demand in our industry are positive. These include:

• “The fact that Australians are still very reluctant to use public transport like they did in the past which has driven up the price of second-hand cars as families buy a second or even third car to ensure they can get to where they need to be without relying on transport.
• “New car sales that had already experienced two consecutive years of month on month declines have been decimated this year. This will drive up the average age of vehicles meaning that a greater proportion of vehicles will and are being serviced in the independent aftermarket.
• “With many interstate boarders still closed and international borders closed for the foreseeable future we are seeing the return of the family road trip which has seen a massive boom in the sales of 4WD accessories and vehicle modification services.”

As we previously discussed, almost all of the automotive industry’s franchises fall into the bracket of aftercare. And with this, there are experts expecting the future to look bright.

Therefore, if you are interested in becoming a business owner and franchisee, then now could be the ideal time for you to make that move.

If you are interested in any of Franchise Direct's automotive franchise opportunities, simply click a profile above for more information. After you fill in your details, they will be in contact with you to discuss the next steps.