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Jeeps era is over. For now

15 December 2010 / 13:12:07  GRReporter
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Jeeps era is over. Now only those who really have a lot of money and can afford them buy the powerful luxury cars. All the rest make do with cars up to 1600 cubic meters. This was the conclusion of my conversation with Aris Hiotelis, manager of Nissan Auto Praxis on Sigru Street in the capital. The interest in the automotive market development was prompted after it was announced that a businessman from the car import and trade sector took his own life early this week. Imerisia newspaper announced the tragic news first in a brief article on the case, saying that the reason could be serious financial difficulties in the company. GRReproter engaged to examine the problems of real business of import and trade of cars.

The president of the Association of traders and importers of cars Apostolos Petimezas painted the situation of the automotive market in particularly dark colours. His expectations are that the 2010 total new vehicle sales will not exceed 165,000 which is significantly less than the approximately 230,000 new cars sold in 2009. "2010 turned out to be the worst of the last forty years for car dealers. The market has shrunk by over 60 per cent for the past two years. About 20,000 jobs related to trade and maintenance of cars in Greece were lost only this year."

Apostolos Petimezas stressed that there are many problems in the sector and personal concerns have repeatedly linked to woes in business operations. He avoided in this way to give a direct answer to the question about the tragedy that happened early in the week, but made it clear that financial woes could be the main reason for the tragic death of his colleague.

Much more positive, however, was Aris Hiotelis from Nissan Auto Praxis. "It's been times when Mercedes, Jeeps and Porsches were sold like hot cakes. We need this crisis, because the market will become more stable and healthy." According to his observations, the first impact in car trade has come with the advent of the global crisis in 2008. Then, rates headed sharply downwards. Currently, companies are operating on the market with 70 per cent lower turnover than 2006-2007. However, the dealers established in the country continue to operate and are not threatened by bankruptcy."

Most enterprises in the sector that have stopped working in this period had no sound basis. "Car trade like any other work requires consistency, quality of services and partnership with the customer – this is the only way to keep the business alive." He didn’t deny that spending cuts, more flexible management and even staff cuts are inevitable, but things are not as bad as presented.

There will always be people who will buy cars, apartments, clothes and other goods, it is just they are scared at the moment, stressed the car dealer. He said the economic crisis is overexposed in the media, which inevitably affects the consumer psychology. Another obstacle on the market is bank lending and leases. Hiotelis Aris said that the problem is not so much a lack of liquidity, or in other words, because the banks have no money, but because they don’t lend it. Loans are not as available as two years ago. For example, financial institutions require a Greek citizen to guarantee for lending to foreigners.

Last but not least, the businessman noted that when PASOK came to power in late 2009 the government canclled the right to recycle old cars, which was an important incentive in the decision to buy a new car. This week the Parliament passed a law to make recycling effective, which is welcomed by dealerships in the country. According to the representative of the Association of retailers and importers, this law combined with the new and more equitable road taxes will lead to market growth of at least 25 per cent in 2011.

Tags: EconomyCompaniesCar marketCrisisNissan Autо PraxisJeepsMercedes
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