Vic: Auto industry 'doing it tough'

AAP General News (Australia)
08-12-2001
Vic: Auto industry 'doing it tough'

MELBOURNE, Aug 12 AAP - Victoria's automotive industry is doing it tough, with small
businesses gloomy about their future prospects, according to a new survey released today.

The survey, conducted by the Victorian Automobile Chamber of Commerce (VACC), found
that more than 70 per cent of businesses surveyed did not expect the state or national
economy to improve over the next 12 months.

More than 70 per cent also believed that the performance of the retail automotive industry
would remain unchanged or further weaken over the next 12 months.

Almost 80 per cent of respondents indicated they would be unable to take on any additional
employees in the next financial quarter.

Businesses surveyed included crash repairers, mechanics and service stations.

VACC executive director David Purchase said the industry was suffering the "double
whammy" of heavy taxation, particularly the GST, and rising competitive discounting.

"Competitive discounting is not just limited to service station operations, but is
increasingly being felt in the mechanical and body repair sector with costs heavily influenced
by insurance companies wrangling down prices for repairs," Mr Purchase said.

"With flattened sales revenue and no comfort on the horizon to competitively raise
prices, together with compressed profit margins, the retail automotive industry is doing
it tough."

Mr Purchase said small businesses were finding it almost impossible to remain profitable,
employ extra staff or increase capital expenditure on equipment or property.

AAP jt/cdh

KEYWORD: CAR SURVEY

2001 AAP Information Services Pty Limited (AAP) or its Licensors.