Car Dealership Problems in America
It seems that they are having a few problems over in America in terms of failing car dealerships. Over the weekend there was a report released that projected that almost four thousand automotive dealerships could potentially go out of business before the end of the year and next year. This is due to a combination of a reduced number of cars being sold, a rise in maintenance costs and the overall state of the countries’ economy. Also, to add to the woes of such businesses, potential investors from the automotive industry are no longer willing to invest; especially in the used cars market as the environment is just far too unstable at present, which presents increased, challenges to earn money. This news comes after one of the biggest Chevrolet dealerships filed for bankruptcy due to their being much less of a demand for their cars and also due to the lack of finance and credit being available to buyers due to the downfall in the banking system. This came as much of a surprise for many as the company was previously operating at over 2.5 million dollars per year (when at its optimum level). The forecast also stated that the sale of lighter cars is expected to decrease to just less than fourteen million vehicles during next year. The result of this being that the dealerships will need to cease trade. It is expected that 2009 will be a poor year in terms of performance for the used car industry and that it will not be until the year 2010 or 2011 that sales will begin to increase again. However, it isn’t just Chevrolet that has been hit; Ford and Chrysler are also experiencing a decrease in demand for their cars. There has been as much as a twenty four percent decrease, which has contributed to the downfall of sales. The new cars section of trade has also been drastically hit given the cost for production is much greater than for used cars. It is expected that the automotive dealerships will be operating a tight ship up until the end of this year and throughout 2009 where it is expected car sales will decrease even further. The fact that finance is not as readily available to buyers as it once was, has had a massive effect on vehicle purchases and profits.