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Interest Rates Hit Dealerships Twice

Interest rates do not hit an automotive dealership in only one place. They affect the customer deciding whether a monthly repayment is affordable, and they affect the dealership funding the vehicle while that customer decides. That double exposure means a rate environment can reduce demand at the same time that the cost of carrying slower-moving inventory increases. For management, that is not merely an economic headline. It changes the maths behind stock depth, pricing and working capital....