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70% decrease in the sales of cars

16 October 2010 / 11:10:58  GRReporter
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The total number of sales of cars in the last year decreased by 70%. The decline began as early as 2008, when over 2500 car dealers went bankrupt, while 13,000 people lost their job positions. The data were presented by the Association of Automobile Importers and Dealers in Greece, which estimated that in the next three months another seven thousand automotive retail agencies will close down.

The forecast is that the year 2010 will end with another 20 thousand unemployed, and the amount includes not only traders, but also administration and the people employed in the industry of those providing technical servicing. Unemployment in the sector at the beginning of the year was 10%, however by the end of 2010 it will be doubled. The Association estimated that with the change in market conditions the country has lost at least 300 million euros of revenue for 2009 and predict that for 2010 this loss will increase to 500 million euros. The total number of new cars sold this year does not exceed 160 thousand, and the most optimistic expectations for 2011 are that their number will reach 90,000 cars.

Except for the overall economic crisis, the reasons for the dramatic decline in sales are also the high road taxes, which the government imposed with the introduction of the reform in the tax system. The low liquidity of the banks which do not lend lease, as well as the additional luxury tax on new cars from a higher class, also contribute for the lower turnover. "We can not take it anymore, we won’t make it for a long time in those conditions," said Petimazas. Car dealers want the government to reconsider the latest changes in the law and to cancle the luxury tax. In this way it will enable the financially stronger people (no matter how much their number has decreased) to afford a new car. Another suggestion is to put back in force the measure to recycle old cars for a fee, which had a great success in the past years and gave an additional incentive to owners of older vehicles to replace them for new ones.

As a result of the downturn in sales and the more pessimistic expectations for next year, importers of cars are forced to renegotiate terms with the companies manufacturers in Europe and Asia. The Vice-President of the Association of Automobile Importers and Traders Arkadios Tsivelikidis said that parent companies should take into account the new economic conditions and to reduce the percentage of profit in order for the local offices and subsidiaries in the country to survive.

Tags: Economy Markets cars crisis
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