Dealers in the doldrums amid price war

With inventories rising amid an intense price war, auto dealers in China are having a tough time making a profit, according to a report by British consulting firm Deloitte.

Dealer margins are hurt by their heavy reliance on new vehicle sales, a challenge compounded by rising operational, labor and financing costs, said the report based on surveys and in-depth interviews with dealers.

The report said one cause for dealer doldrums is the low percentage of revenues from parts and after-sales services.