Cars making a comeback: New models, easier credit helped lift auto sales in 2010
Northern Nevada Business Weekly
A substantial rise in taxable sales of motor vehicles and auto parts in September points to a recovery in the auto market for dealerships in Carson City and Reno.
Auto dealers in Carson City say that although sales levels aren’t anywhere near where they were before the recession and tightened lending practices curtailed new vehicle purchases throughout 2009, they definitely are on the rise, primarily due to new product offerings. Taxable sales on vehicles and parts rose 33 percent in September 2010 from year-earlier numbers, the state Department of Taxation reports.
“The difference between last year and this year is night and day,” says Stephen Christian, general manager of Carson Dodge Chrysler Jeep. “We are not out of the woods yet, and business is not what it was three or four years ago, but we can see that it is on the uptick.”
For the current state fiscal year, taxable sales on autos and parts in Carson City are up
6.7 percent. September’s taxable sales figure of $13.56 million is still down almost 12 percent from the September 2008 total.
Christian says several factors have led to a 30 to 35 percent increase in revenues this year. Carson Dodge was awarded a Jeep dealership in October of 2009 when Chrysler Corporation was plodding through bankruptcy, and sales of the new Jeep Grand Cherokee have outpaced all other vehicles.
The Jeep line has made a substantial contribution to the revenue stream at Carson Dodge Chrysler Jeep. Additionally, Christian says, Chrysler is coming out with a new Dodge Charger, minvan, and four-door sedan that should buoy sales in 2011.
“We are optimistic that it is going to continue,” Christian says. “We wouldn’t be so optimistic if Chrysler wasn’t coming out with so many new products. But the people that write about these vehicles and are evaluating the new Chryslers, Dodges and Jeeps are liking what they see.”
Tim Hohl, sales manager for Michael Hohl Motor Company, which carries the Chevrolet, Buick, GMC and Cadillac lines in Carson City, agrees that business is picking up. Michael Hohl Motor Company has seen improvements across all its brands, Hohl says.
Although sales of the Chevy Camaro and new GMC and Chevrolet trucks have remained strong, sales of the Buick brand have risen substantially – revamped models and a new Buick LaCrosse have led to a 50 percent increase in sales of that line.
“GMC and Chevy both have been exceptionally successful for us,” Hohl says, “and we may not sell as many Buicks, but Buicks compared to the last five or six years have sold double the amount this year as they have in previous years.”
Hohl says one of the reasons dealerships are moving more vehicles is because lending has gotten easier, and there’s less competition. Many used car dealerships have folded in the past few years, and even a stalwart such as Carson Nissan was forced to close its doors on Oct. 1. Owner Jeff Woodward lost his Jeep franchise to neighboring Carson Dodge when Chrysler restructured in 2009, and the dealership could not continue operating with just one brand.
“Banks are starting to give a little bit more money, and manufacturers are catching up and adjust their business practices to a different environment,” Hohl says. “Everything is running a bit more smoothly and efficiently.”
Pent-up consumer demand also factors in, notes Christian. Throughout the recession people have tapped service departments to fix older vehicles, and many of those vehicles are nearing the end of serviceable life.
“People have been trying to keep older vehicles glued together, and some of them are reaching the point where it just is not feasible to try and make them last any longer,” Christian says.
Dick Campagni, owner of Carson City Toyota Scion and Capital Ford, Mazda, Hyundai, says that although business has increased this year at his dealerships, he didn’t suffer too much of a decline in sales in 2009 because of strong management practices.
“Whether the economy is good or slow, you still have got to run a business the same way, treat people the same. If you do that you will be successful,” Campagni says.
Sales are up elsewhere in the state as well. Taxable sales on autos and parts in Washoe County rose almost 10 percent in September of 2010 compared to a year ago, and Elko County was up 23 percent.
Ryan Dolan, general manager of Reno Toyota, says that although Reno Toyota has seen a slight increase in sales this year, getting back to pre-recession sales volumes is a long way off. Adjusting business and marketing strategies, as well as personnel, are much more important for dealerships today than ever before, Dolan adds.
Reno Toyota this year opened a new 300,000-square-foot dealership, which impacted its bottom line as well.
“The first seven years I was here you could plan out a year in advance,” Dolan says. “After this recession, it is a day-to-day, month-to-month business. You have got to make changes, strategically advertise differently, and your money has to go a lot further than it used to. You have to remake yourself almost monthly. I have learned more in the last two years than I did my first eight in this business.”