Ernst & Young have warned small and medium sized car dealerships are likely to face the toughest financial year for a long time, as economic uncertainty, slumping consumer confidence and less disposable income will lead to a downturn in sales.
Although the sector showed an increase in new car sales in 2007, the report suggests that most of the small and medium sized companies struggled to break even.
With the current credit restrictions banks will become more careful about who to lend money to, another factor that leads Ernst & Young to believe that “many small and medium sized dealers could be heading for financial distress.”
The report says that the larger dealerships are best placed to survive the down turn in trade by virtue of their size and their scale of drive in promoting sales.
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1 Ernst & Young Concern For SME Car Dealers at Credit Reports on Credit Speak // Apr 6, 2008 at 5:45 pm
[...] Ernst & Young Concern For SME Car Dealers Although the sector showed an increase in new car sales in 2007, the report suggests that most of the small and medium sized companies struggled to break even. With the current credit restrictions banks will become more careful about … [...]