Whew!
A collective sigh of relief came from car dealers throughout Southern California as 2009 ended bringing to a close one of the worst years faced by the auto industry in decades.
While 2010 is expected to bring an improvement in sales as the carmakers begin to right themselves after an extended period of financial difficulty there remains the question of how much improvement and how rising gas prices and low inventories will play into that.
Ford Motor Co. CEO Allan Mullaly anticipates additional sales of 1 million to 2 million vehicles in 2010 over the 10.5 million in 2009.
At Acura of Valencia, co-owner Don Fleming said the phone is beginning to ring again and that the traffic count has picked up a little.
“Everyone knows we have deals,” Fleming said. “We’re just getting our name out and letting (buyers) know we are here when they are ready.”
In California, car and light truck sales from both domestic and foreign manufacturers was down by 35 percent through Sept. 30 when compared with the same period in 2008, according to figures from the California New Car Dealers Association.
The association’s Director of government Affairs Brian Maas is of the opinion that gas prices will dictate where the car market goes this year.
When prices hit $4 a gallon in summer 2008 there was a dramatic change in the market with buyers going for smaller cars and hybrid vehicles with better gas mileage.
The challenge for the industry will be in having those types of vehicles available if gas prices skyrocket again.
“Over the long term the small car market is doing better,” Maas said.
Oren Weintraub agrees that gas prices will be a major factor for the auto industry this year.
But as president of Authority Auto, a car buying concierge service based in Sherman Oaks, Weintraub is more interested in the number of cars manufacturers will send off the assembly lines.
Adjusting to the poor market in 2009, the car companies made fewer vehicles. Fleming’s Acura dealership, for instance, went several weeks without any new cars coming in.
With fewer vehicles on the showroom floor the advantage goes to the sellers as the buyers will have difficulty getting a good price and having to spend more time going from dealer to dealer to get the car they want, Weintraub said.
This could be good news for Auto Authority and other car buying services. Weintraub expects that 2010 will be a challenging year in which he and his staff will have to work extra hard to get deals for their clients.
“We feel fortunate to have made the good connections and can get preferential pricing,” Weintraub said.
Also expected to draw customers back is a new product being offered, such as the Chevrolete Volt electric car to be made available later this year from General Motors.
At the recently concluded Consumer Electronic Show in Las Vegas, Ford announced that its spring line up will include new features for its Sync in-car technology that includes voice commands, an 8-inch color touch-screen, and the ability to check tweets from Twitter, listen to Internet radio and get free maps. The car maker is also putting to market hatchback and sedan versions of its Focus model.
Those additions have one Valley Ford dealer expecting a brighter 2010.
“Ford will gain market share,” said Beau Boeckmann, vice president of Galpin Ford in North Hills. “They have great new products.”
For the 20th year in a row, Galpin retained its title of the largest Ford dealer by volume in the world.
The family-owned dealership sold 12 more vehicles than its closest competitor Bill Brown Ford in Livonia Michigan. Woodhouse Ford in Blair, Neb. was the third dealership vying for the title.
“We see it as a market advantage to be number one,” Boeckmann said. “And it says something to our customers too. It is a good marketing message for us.”
As good as the year ended, however, the start had not been as rosy. Survival was more on the minds of the Boeckmann family as the recession caused vehicle sales to plummet at their dealerships as they did across the country.
But then came rumblings of the federal government’s Cash for Clunkers program to spur auto sales. The dealership began to build up its inventory to get the right mix of vehicles that shoppers might buy.
In the final few months of 2009 Galpin still lagged behind Brown and Woodhouse in sales. So the dealership began a concerted effort to pull out all the stops to keep its title.
The dealer reached out to its customer base, sent letters to friends, and had a dinner for its vendors who in turn gave incentives to employees to buy a car. Even Galpin employees were buying cars.
Regular customers came by the dealership to purchase a vehicle so they could help in keeping the title in the San Fernando Valley.
“As crazy as that sounds I heard it over and over again,” Boeckmann said.
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