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Going into the car industry on your own: what are the advantages and disadvantages?

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The automotive market has been impacted by the health crisis and of course distributors and manufacturers have had to adapt.

Between learning to communicate better and optimizing production processes, manufacturers have also had to deal with the energy transformation imposed by Europe: electrification on their range.

The damage of the crisis was limited by state aid and the switch to electric and hybrids. While in 2019 industry cars accounted for only 1% of the market, in 2020 we go to 6.7%.

Faced with the health crisis, many households have deserted cities for small towns with no public transport, which has boosted car purchases.

The second-hand market is doing well and broke a historic record in 2021 with 6 million cars sold. The car market is therefore favorable at the moment. It should also be noted that given the technological complexity of cars, individuals are no longer able to repair their cars alone.

The market being what it is, there are still a few things to respect when you want to open your garage. The steps to creation are simple, but require real preparation and adaptation to the current economic situation.

When you come from the profession, you often want to go to the other side. The path is not easy, and we are sometimes a little lost between administrative procedures, market potential, operations and the economic situation of the sector.

So what are the advantages and disadvantages of becoming self-employed in the automotive sector? What about now?

Ideally, you must have a diploma in auto mechanics (mechanical CAP, or any training to become an auto mechanic). But, opening a garage without a diploma is possible provided that you have at least 3 years of experience as a car mechanic. You can also take over an existing garage or join a dealership or franchise network. But be careful, it is therefore necessary to analyze several essential points: the reason for the sale, if it is part of a network, the support for the takeover or not and the type of offer it offers.

Step 1: mandatory market study

We advise you to do a market study . This will allow you to ensure that the project is viable with an analysis of demand on the local market, a study of the existing offer on the local market, the choice of suppliers for the acquisition of spare parts and the analysis of the regulations concerning the sector.

Step 2: write a business plan

Essential document, it allows you to check the good profitability of your project. And will allow you to present a solid file to the banks, making it easier for you to obtain a loan. It will demonstrate the seriousness of your approach.

Indeed, some are diversifying in order to build customer loyalty. You can offer mechanical workshops or develop a gas station or car wash business or even sell cars. In these specific cases, you must make an additional business plan specific to these activities.

Step 3: find a place

Finding a place to be able to accommodate all the facilities and equipment necessary for the activity is not easy. However, depending on your financial means, you can buy one, rent it or choose one with an option to buy. We advise you to look carefully at all classified ad sites in addition to professional advertisers. The market being difficult , being accompanied for this step is also possible.

Step 4: think about the equipment and services you want to offer

You obviously have to think about the materials that your garage needs and you must therefore find reliable suppliers to avoid disappointment. You should also think about the type of offer you want to make. It is also necessary to establish the services, the flat rates and the hourly prices that you will offer within your garage.

You can start as a freelancer or create a real company that will allow you to be credible in the eyes of your customers. For information, a SARL is mainly chosen to have its garage.

Self-entrepreneur status will allow you to start your business quickly with fewer costs, an advantageous tax and social security system. But the big drawback is that your personal assets are not protected . It is therefore a potentially dangerous status.

Creating your company allows you to protect your assets, but you must keep accounts with higher social and tax charges.

The legal form chosen and the statutes created, you must now register your structure. This step will allow you to obtain the K-bis of your essential structure vis-à-vis third parties (suppliers, customers, public administrations). Various documents are required and may vary depending on the legal status chosen.

Also be aware that by joining a network, a selection of members is required with sometimes several interviews. You must gain the trust of the latter so that it associates you with its brand and issues you the concession contract or the franchise contract in the event of a successful concept. This approach sometimes does not give you the choice of the geographical area (if the area is already taken). But you benefit from exclusivity concerning the sale of the brand’s products in this area. You can within the networks, create or take over an already established garage.

So what are the advantages and disadvantages of opening a garage?

As you have understood, the automobile market is buoyant at the moment, despite very long lead times sometimes for new ones. The opportunity takes over which is a godsend for mechanics.

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