Future looks bleak for new car dealers
New-car dealers are being forced to shut shop or consolidate as the economy flounders. While the new-car market struggles, the used-vehicle sector has had a boost in sales, says TransUnion SA's latest vehicle-pricing index report.The report shows an increase in new-vehicle prices from 8.4% in the second quarter of this year to 9.9% in the third quarter. With used cars, the price increased from 2.7% to 2.8% in the same period.Both TransUnion and the Automobile Association confirmed that new-vehicle dealers were on shaky ground."We are aware of new-vehicle dealerships closing or consolidating. Some manufacturers will reduce their representation in the form of physical dealerships in the next 24 months," said Derick de Vries, head of Auto Information Solutions at TransUnion.AA spokesman Layton Beard said: "There may be some new-car dealers at risk . Any good new-car dealer would incorporate a used-car aspect in the business."De Vries said highly priced new cars have resulted in a demand for used vehicles."Consumers tend to look for cheaper cars or hold on to their existing vehicles for longer."The top used cars include VW, Toyota, Ford, BMW and Hyundai. ..
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