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Auto Dealers to face the brunt of economic downturn

Neha Dhamija


Now it is the turn of the very healthy and robust automobile sector to face the consequences of ‘Financial Tsunami’. Dips in the sales are being experienced, which can be as high as 50%. The situation has caused dealers to get sandwiched between manufacturers and bankers. Mounting pressures from both the sides has left them helpless.


Reasons being touted for the downfall are ‘high input costs’ and ‘elevated interest rates’. This has led to ‘massive increase in inventory level of the vehicles’. Industry Analysts believe that the troublesome time to continue for yet another two quarters, at least.


Owing to such pessimistic expectations, many dealers have either diversified into other options or moved out of the business, completely. Adding to the woes is the fact that lending rates are soaring and amount available has nose-dived. Despite the conditions, big dealers are expected to rise above the disturbance soon whereas the smaller ones are to be engulfed by it.
 
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