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Fear of an Impending Car-Price Collapse Grips Auto Industry
[Bloomberg] The auto industry -- already fretting lengthy factory shutdowns and depressed new-vehicle demand -- is starting to sound the alarm about a potential used-car price collapse that could have far-reaching consequences for manufacturers, lenders and rental companies.Used-vehicle auctions are for now virtually paralyzed, much like the rest of the economy. The grave concern market watchers have is that vehicles already are starting to pile up at places where buyers and sellers make and take bids on cars and trucks -- and that this imbalance will last for months. Dealers also are looking to tap the used-car inventory sitting on their lots into whatever money they can muster. One of Manheim's biggest tasks now, Cox Automotive's Pollak wrote in his letter last week, is finding places to park the stream of vehicles headed for auctions. "It's critical for dealers to recognize what may be an unpleasant truth," Pollak said. "It might take all the cash you can gather to sustain your business today and put it in a position to be viable when the market comes back." Posted by: KBK 2020-04-15 |
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