Swiss car dealers are under pressure with sales of new cars down seven per cent in 2000 to 315,398.
Thursday's report from the industry's professional body warns that profits will be severely hit by reduced operating margins.
The worsening situation is blamed on the saturation of the market. Dealers are advised to cut prices to increase sales.
The industry's association also said that carmakers and importers were demanding more investment from dealers in the shape of bigger showrooms and a larger range of vehicles.
In addition, it said that dealers are also having to pick up costs such as delivery, development and publicity.
swissinfo with agencies