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More car dealers expected to close in California amid sales plunge, higher tax
Last Updated(Beijing Time):2009-03-03 09:39
The business situation for car dealers in California, which is the largest single auto market in the United States, is expected to get worse amid sales plunge and the coming vehicle tax hike, a report said on Monday.

About two dozens of dealers have closed their businesses across California since the beginning of 2009, including two in Los Angeles County, long considered the car capital of the country, according to the latest edition of the Los Angeles Business Journal weekly.

Among the 137 new-car dealerships that closed last year in the state, 32 were in the Los Angeles area, it said.

Meanwhile, industry observers said that dealers would find it harder to sell vehicles after California's state legislature nearly doubled the car taxes last month to help close the state's 42-billion-dollar budget deficit.

It is estimated that the cost of an average-priced new car would increase nearly 400 dollars after the new taxes take effect in April.

New car sales fell by 23 percent last year in California, worse than the drop of 18 percent across the United States.

In Los Angeles, local dealers said that business is down between 25 percent to 45 percent so far this year, compared with a mediocre 2008, as the conditions that have slowed sales worsen, aside from the car tax hike.

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