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U.S. markets recover from steep losses
NEW YORK, Oct. 21 (UPI) -- U.S. automobile dealers report the credit crunch and consumers' switch to fuel-efficient vehicles are cutting sharply into business.
"Most car dealers were down 30 percent last month, and that is a catastrophe," Ray Ciccolo, owner and chief executive officer of Village Automotive Group told USA Today.
The National Automobile Dealers Association said out of 20,000 new car dealerships 61 either closed or downgraded to used car lots in September, the newspaper reported Tuesday. About 600 have folded this year, USA Today said.
The difficulty in finding credit is part of the reasons sales are down. General Motors' finance service, GMAC, is requiring a credit score above 700 before it will approve a loan, the newspaper said.
High gas prices have propelled a consumer switch to small cars, which have smaller profit margins than trucks and SUVs. Those looking for larger vehicles are asking for huge discounts, USA Today said.
Mike Jackson, chief executive officer of AutoNation, said the future will include fewer dealerships, less haggling over prices and better customer service.
"At the dealer level, a shakeout needed to happen," he told USA Today. "It will be painful. It will be ugly. But it is also long overdue."
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