Dealer Management System Market Analysis and Forecast to 2031: By Deployment Type (On-Premise, Cloud-Based), Application (Automotive, Mining, Construction, Agriculture, Others), and Region

Dealer Management System Market Analysis and Forecast to 2031: By Deployment Type (On-Premise, Cloud-Based), Application (Automotive, Mining, Construction, Agriculture, Others), and Region

The global dealer management system market was valued at US$ 7.6 billion in 2021 and it is anticipated to grow up to US$ 11.5 billion by 2031, at a CAGR of 4.1% during the forecast period.

A dealer management system (DMS) is software that equips dealers with powerful tools. The platform includes actual-time insights, automates tasks, and turns data into profitable growth, all on a single platform built especially for several dealerships. The dealer management systems also allow payroll services, seamless financial reporting, and cash flow management. The systems integrate a suite of the finest technologies such as business intelligence reporting, customer relationship management (CRM), and inventory management. They further assist dealers in enhancing customer conversions and customer retention, allowing them to maintain a remote help desk.

Market Drivers and Trends

Over the past few years, the automotive sector has experienced numerous technological advancements. The impact of modern technologies has shaped the automotive sector over the course. The advancements in digital technologies have made it possible for automobiles to implement advanced solutions. The DMS is an optimal solution for automobile companies involved in spare parts inventory and works order management tasks. The system incorporates CRM and business intelligence tools to track automobile manufacturer and customer relationships. Several car dealers use DMS to manage their inventory and sales. These systems also enable car dealers to streamline interactions between customers, dealers, and original equipment manufacturers (OEMs). Moreover, DMS support the unique needs of the retail automotive industry. The DMS drive the sales of new used vehicles, consumer financing, repair maintenance services, and vehicle parts inventory management. Besides, DMS allow cash flow management, financial reporting, and payroll services. The system incorporates OEM data processing systems and allows automotive retailers to order vehicles parts, process warranties, and receive vehicle records. Thus, the increasing adoption of innovative dealer management systems in the automotive sector propels the market growth.

Market Restraints and Challenges

In this day and age, cyber security should be a top priority in companies of all types and sizes. The number of threats and their sophistication is increasing by the day. Data has become the lifeblood of most organizations and the major driver of day-to-day operations and top-level decision-making. Security breaches that lead to loss of data can result in a catastrophe. Not taking cyber security seriously can lead to irreparable reputational damage, fines issues with licensing in the case of regulated businesses, adverse media coverage, increased anxiety stress levels in the workforce, business interruption, and breach of privacy financial losses. And some of the DMS solutions are unable to counter cyber-attacks. Thus, security concerns due to the lack of cybersecurity measures are acting as a restraining factor for the global dealer management system market.

Global Dealer Management System Market Segmental Overview

The report analyses the global dealer management system market based on deployment type, application, and region.

Global Dealer Management System Market by Deployment Type

Based on deployment type, it is bifurcated into on-premise and cloud-based. The cloud-based segment is expected to have the largest dealer management system market share in 2021. Over the years, the demand for cloud-based systems is expected to grow substantially due to the cloud-based dealer management system offering enhanced flexibility, scalability, and security to its users. Further, it allows the end users to receive automatic software updates without additional capital expenditures, improving technology competitiveness. Due to these factors mentioned above, the cloud-based dealer management system is expected to receive the main market attraction resulting in market growth.

Global Dealer Management System Market by Application

Based on application, it is segmented into automotive, mining, construction, agriculture, and others. The automotive segment is expected to be the largest segment in the dealer management system market in 2021. The automotive sector is increasingly adopting DMS solutions because new and used vehicle sales, consumer finance, vehicle repair maintenance services, and parts inventory management are all driven by the DMS. Payroll services, financial reporting, and cash flow management are also available. Further, automotive stores may order vehicles components, handle warranties, and get vehicle records using the system, which integrates with OEM data processing systems. As a result, the automotive sector's rapid adoption of a novel dealer management system propels market expansion. Thus, the automotive segment will likely hold a major market share in 2021.

Geographical Analysis of Global Dealer Management System Market

Region-wise, it is studied across North America, Europe, Asia Pacific, and the Rest of the World. The North America market is expected to hold the majority of the market share in 2021 owing to greater investment in automation and software coupled with growing number of dealership store in this region. This trend is prominent due to change in government policies and change in consumer behavior. Additionally, the software developers of DMS are mostly present in North American region. This, in turn, boosts the demand for dealer management systems in the North American region.

Major Players in the Global Dealer Management System Market COVID-19 Impact

The COVID-19 pandemic compelled many countries to impose lockdown in 2020, which ravaged businesses in these countries and led to the discontinuation of auto dealership operations. DMS helps dealers to stay updated regarding the current market trends and changes. Thus, a slump in the businesses of dealers also slightly hindered the growth of the dealer management systems market in 2020.

However, as per the National Automobile Dealers Association (NADA), the US government allowed the auto dealership business in the COVID-19 pandemic in 2020. Since auto dealers were back in business, the demand for the DMS upsurged, specifically in the North American region.

Recent Developments

• January 2021, CDK Global, Inc. had launched Neuron, an open, intelligent data platform connected to the Fortellis Automotive Commerce Exchange. Neuron was designed to turn high volumes of industry information into easy-to-understand, actionable insights for dealers, OEMs, and third-party software developers.
• November 2020, Integrated Dealer Systems had launched IDS Service360, an end-to-end service solution that integrates effectively with the IDS Astra G2 dealership management system. IDS Service360 empowers dealers to work more effectively and collaboratively, helping them manage and reduce their repair event cycle time.
• February 2020, DealerSocket, Inc. had announced the completion of its acquisition of Auto/Mate (a leader in DMS for automotive dealerships). With this acquisition, the two customer-service-focused companies offer dealers a comprehensive new choice for an all-in-one, intelligent software platform for their dealerships.

Frequently Asked QuestionsQ1. How big is the dealer management system market?Ans. The global dealer management system market size was US$ 7.6 billion in 2021 and is anticipated to reach US$ 11.5 billion in 2031, growing at a rate of 4.1% from 2022 to 2031.Q2. What is the dealer management system market growth rate?Ans. The growth rate of the dealer management system market is 4.1% from 2022 to 2031.Q3. Which region holds a major market share for the dealer management system market?Ans. North America holds a major market share of the dealer management system market in 2021.Q4. Which segment accounted for the largest dealer management system market share?Ans. Based on deployment type, it is bifurcated into on-premise and cloud-based. The cloud-based segment is expected to have the largest dealer management system market share in 2021.Q5. Who are the key players in the dealer management system market?Q6. What are the factors driving the dealer management system market growth?Ans. The major factor driving the growth of the market is increasing adoption of innovative dealer management systems in the automotive sector.Q7. What are the key growth strategies of dealer management system market players?Ans. The key growth strategies of dealer management system market players are product launch, partnerships, and government initiatives.Q8. Which region will provide more business opportunities for the dealer management system market during the forecast period?Ans. The Asia Pacific region will provide more business opportunities for the dealer management system market during the forecast period.

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