Jan 9

5 Common Issues in Auto Dealership Construction & How to Avoid Them


There’s no industry that’s immune to the typical challenges of commercial construction, auto dealerships included. Building a car dealership can be fun and exciting – after all, who wouldn’t want to build a space to put beautiful cars on display? Still, auto dealership construction presents a unique set of challenges that others may not face. High end finishes and the mix of retail with service areas are just the beginning of the uniquities in an auto dealership. Knowing what pitfalls to look out for and how to navigate them if they do pop up is what we here at Gidel & Kocal Construction do best. Work with us and we’ll help you avoid these issues as well.

Business Operations

5 Common Issues in Auto Dealership Construction & How to Avoid Them

Some clients fail to account for the fact that this business is really three businesses in one: it’s a showroom, a retail space, and a negotiation center. That means combining a display center with a transactional area and adding conference rooms into the mix. Choosing a space that can accommodate types of operations is essential.  Additionally, accounting for all three types of businesses is critical when developing the budget.

Budget Overruns

5 Common Issues in Auto Dealership Construction & How to Avoid Them

Unfortunately, budget overruns are common in any industry. While this isn’t an issue exclusive to car dealership construction, the ways cost creep occurs here are. Proper budgeting and cost allocation are critical to the success of building an auto dealership.  It’s important to fully understand both the interior and exterior construction costs of auto dealership construction and allocate your budget accordingly.

Setting a budget for construction of an auto dealership is multifaceted. There will be costs for the interior of the facility (i.e., lighting, HVAC, maintenance, etc.) as well as for the showroom/display center. Prioritization and strategy will help minimize additional unexpected costs and help you stay within budget. The best way to ensure this actually happens is to work with a reputable auto dealership construction company. Companies like Gidel & Kocal Construction have navigated these challenges before and are well-equipped to help you bypass them.

Project Delays

Another common issue auto dealerships run into in construction is project delays. Materials being backordered, inclement weather conditions, failure to pass safety and site inspections, and a host of other issues could arise that may delay the project’s timeline. This becomes especially relevant when there is an indoor and outdoor component to an auto dealership, as there often is. While some amount of delay is normal, the goal is always to stick to the construction schedule as closely as possible. Experienced project managers can help all teams remain in sync and stay on task.

Compliance Challenges

5 Common Issues in Auto Dealership Construction & How to Avoid Them

Auto dealership construction must abide by certain land permits that are specific to the California Department of Consumer Affairs. Each city and county in California has its own set of guidelines for vehicle sales as it relates to use of land permits. At a minimum, auto dealerships must have a Property Use Verification For Dealer’s License. Additional licenses that may need to be obtained include:

  • Auto retail sale
  • Auto wholesale
  • Auto broker
  • …and more

Office space and zoning requirements for new, used, wholesale, and brokerages must also be adhered to. Additionally, there are separate compliance challenges for parking spaces, which are unique to car dealerships with outdoor lots. Understanding how to build in accordance with these parameters is only something a contractor with experience in auto dealership construction can do. Gidel & Kocal Construction has completed numerous car dealership construction projects for leading car manufacturers in the San Francisco Bay Area.

Site Selection

5 Common Issues in Auto Dealership Construction & How to Avoid Them

This element is all about choosing the right location based on foot traffic, parking lot space, showroom capacity, conference rooms, and retail transactions. The aforementioned compliance challenges often play a significant role in site selection as well. Layer on budgetary constraints and site selection for constructing an auto dealership becomes trickier than you may have imagined. Once again, the best way to ensure that you make the best decision for your business while remaining compliant with all governing regulations is to work with a team that has done this before. Gidel & Kocal Construction’s satisfied clients are a testament to our success in both the auto construction industry as well as other commercial spaces.

If you have plans to build an auto dealership in the San Francisco Bay Area or want to renovate an existing one, Gidel & Kocal Construction is here to help. Contact us today to learn more about our services and offerings.

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