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Officials in the banking sector compared the automotive market in Greece to a time bomb ready to explode at any moment, as the total debts of importers, traders and officials, amount to 7 billion euros! Furthermore it should also be taken into account that 50% of the loan contracts are not currently served, and the outlook for the immediate future looks a little dim.

According to market factors, not only the banks, but also the suppliers, the automotive industry may be facing a huge domino effect that will be caused by the collapse of many private companies, including companies - importers.

Along with this, the constant decline in sales of new cars, the dramatic decrease in the turnover of authorized repairers, but also of the independent ones, combined with the lack of liquidity in the market, have created ideal conditions for further closures of companies in the sector, while currently 4,000 companies have already closed down!

As Evripidis Konstantinidis, a board member of the Association of Automobile Importers in Greece, noted: "Car dealers have already found themselves in the "eye of the cyclone", of the economic crisis without receiving any help from anywhere and are over head and ears in debt to banks. If financial and credit institutions in the country do not introduce special regulations and extension of payment terms for the loans, it is very likely that they will become the owners of thousands of cars, but also of hundreds of real estate properties which they will not be able to manage. At the same time, due to the recession  which will continue also in 2012, the few strong companies in the sector are expected to also start losing money, and if they are not granted any loans, they in turn will also collapse. Furthermore, 8 out of 10 dealers can not pay the additional tax that is paid together with the electricity bills as well as the personal property tax, and the state will have to demonstrate its social nature, if it wants to have any revenue from the automotive industry ... "

Excessive costs

One by one the authorized networks of importing companies begin to "fall" because their owners cannot even cope with their daily financial obligations. As the owner of a "vertical" company mentioned, "We are all left at the mercy of fate. If the banks and the government don’t stop asking for money all the time, the end will come quickly and will cause a domino effect on the market. I think that no owner of a "vertical" company has any funds to pay additional taxes, and for some time now a large part of the authorized companies do not pay VAT, insurance payments, loan instalments, in order to be able to pay their employees living expenses".

The cost of a "vertical" company, according to market factors, amounts to at least 40,000 euros a month, which means 2000 per day. A few years ago it was relatively easy for someone to collect these funds, today however, not only can he not collect them, but he constantly subsidizes his company. Furthermore, the additional tax that is paid together with the electricity bill and is nearly 20,000 euros, along with tax on high real estate amounting to 16,000 euros if it is for a private company, are added to the monthly costs that exceed 76,000 euro in November, while earnings do not exceed in the best case, 10,000 euro.

They have no money even for benefits

The situation in which businessmen in the automotive industry are placed is tragic, because as they say themselves, they have undertaken redundancies, wage cuts, further cuts and still calculations still do not come out right and they still have to undertake further redundancies. But there is a huge problem here because they have no money even for the compensations! There are two solutions: they either sign bonds that eventually the employee may not accept or as a compensation they give the employee some used vehicle, which he may also not accept. Of course, even just thinking about the bankruptcy of a company its employees agree to take the used car rather than bonds.

Fired employees from the automotive companies, however, turn to the "black" market and create enormous problems for the legal firms in the industry. In particular, most of the dismissed employees create online shops and sell cars whereas laid off mechanics turn their garages into workshops. All this, of course, is done safely because nobody can find them, and the money they earn is exempt from taxes; furthermore they don’t pay allowances, or other costs which the freelancers have.

Damage is double because the state is losing millions of euros and on the other hand automotive companies suffer unfair competition from former employees.

Forthcoming bankruptcies...

Rumours that large companies from the automotive industry will soon be closed down, are spreading more and more. Nevertheless, according to information, one importing company, which in the past two years has opened new commercial sites, has encountered a lot of problems within its authorized network, and it is said that it will soon be replaced by a subsidiary of the factory; it is therefore strengthening its positions on the retail market.

Another importing company, which imported models with GPS systems, which however does not function in Greece, refused to return the money to the owners because it has nowhere to take it from. Given that each system paid for by the consumers costs 2,500 euros ...