Used car dealers feeling crunch – daily

The Czech daily Právo on Monday reported that used-car dealers have been feeling the crunch of the continuing economic crisis. Overall, sales of cars (both new and old) in the country have slumped, and those still in the market for a new vehicle now appear more likely to buy new smaller vehicles than a used car for about the same price.

A little earlier Jan Velinger spoke to Lyle Frink, a journalist in the automotive industry, asking him how he saw current developments.

“I think if you look at the whole picture Czechs are losing an interest in cars as a major purchase item. New car sales are down, so I’m not surprised that the same holds true for used vehicles too. There have been big shifts in demand and work for people that I think there is a major uncertainty now for many to purchase a car, whether old or new.”

Wouldn’t one expect, though, that if people weren’t buying new to save money, they would turn to used vehicles?

“That’s true and is a little surprising. But what I think is that used car lots have yesterday’s fashions: bigger cars that were a demand a year-and-a-half ago that have gone out of style.”

What are used car dealerships likely to do in these sort of troubled times?

“I think that they have to try and reduce their stocks as much as they can and reduce staffing, as well as I guess reduce their prices too. Of course this is nothing unique to the Czech Republic, it happened in the US a year or so ago and is still a problem: in the US they took a hit when consumer demand shifted from SUVs to smaller cars, leaving them stuck with trucks and SUVs.”

At what point will Czech consumers return and beginning buying again?

“I would say a couple months of normality.”

Those who aren’t suffering right now and are in the market for a vehicle, are now more likely to buy a new car for around 170, 000 crowns, correct?

“That’s right. There are such deals on new cars right now that the used vehicles might just not be able to compete. You can get more for your buck, a little bit of glamour that goes with a new piece of metal, so why go for a used car?”