A car dealership or vehicle local distribution is a business that sells new cars 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.

Americas

USA

• Car dealerships in the USA

  Australia

  Japan

  China

  In China, an authorized car dealership is called 4S car shops. The 4S represents Sale, Sparepart, Service and Survey. 整车销售(Sale)、零配件(Sparepart)、售后服务(Service)、信息反馈(Survey).

  In most cases, brand-name new cars can be purchased only from 4S shops. For new cars in high demand, a high premium is added for instant delivery or just placing an order.

  The profit of car dealers in China is quite high comparing to the rest of the world, in most cases 10%. This is due to the non-transparent invoice price as announced by manufactures and to the premiums they charge for quick delivery. Due to the lack of knowledge for most customers, dealers can sell add-ons at many times the price found in the aftermarket.

  There is no regulation by either the government or associations.

  Europe

  

  This field is ruled by Commission Regulation (EC) NO 1400/2002 of 31 July 2001, 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 repairers. 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 as regards the exemption of distribution agreements for new motor vehicles and spare parts. It also introduces major changes 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.