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40% more dealers may fail this year

October 01, 2008|From Times Wire Services

Closures of new-car dealerships may rise as much as 40% this year as slumping sales and surging borrowing costs cut into profits, the National Automobile Dealers Assn. said.

As many as 600 may shut down or consolidate with other dealers, equal to about 3% of the total, said Paul Taylor, an economist at the McLean, Va.-based group. That compares with 430 a year ago.

Dealers for the big U.S. carmakers -- General Motors Corp., Ford Motor Co. and Chrysler -- will probably account for the bulk of the closings, Taylor said.

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