car dealers are having a difficult time…many closing no comments
BANDON, Ore. — CNW Research’s latest data indicates that 890 independent dealers have closed up shop in October alone. Overall, the company reports that 2,955 independent dealers have closed since the beginning of the year.
“Since January 1, 2008, 2,955 independent used-car dealerships have shuttered their doors or fallen on such hard times that volume is insufficient to remain viable,” said Art Spinella, of CNW Research.
http://www.autoremarketing.com/ar/news/story.html?id=8739
“Primary reasons: Lack of floor traffic, lack of sales, lack of business and consumer financing availability,” he explained.
However, offering a bit of good news, Spinella said that although overall sales dropped by nearly 14 percent in October versus the prior year, sales for remaining stores were up slightly to 29.8 cars and trucks, compared with 29.1 in September. Also, the October figure is 20 percent better than the same month last year.
“Usually, the used-car business is counter cyclical to new-vehicle sales with one being up when the other is down,” Spinella pointed out. “This year has broken the mold because all purchases have come under scrutiny by consumers and credit tightening has sent many potential customers packing.
“Once the economy rebounds, however, expect the number of outlets to increase to the near 40,000 mark, perhaps by the end of 2009 or the first half of 2010,” he added.
Taking a closer look at used-floor traffic for independents, CNW Research found that, basically, not as many consumers are looking for replacement units.
“A key reason used-car dealers are dropping like flies can be traced to the lack of floor traffic,” Spinella explained. “As with the new-car side of the business, fewer people are out looking for replacement vehicles, reducing dealer-lot visits by more than 50 percent, compared to the same month a year ago.”
“Should the trend continue into the first quarter of 2009, another 2,500 dealers could be left on the cutting room floor by June,” he concluded.
