Valley dealers face tough sales despite Big 3's gains

Published online on Tuesday, Nov. 03, 2009

Sales for two of America's Big 3 automakers were better last month than a year ago, and all three had sales increase between September and October -- signs of a possible change of fortune for the struggling industry.

But dealers in the central San Joaquin Valley aren't out of the woods yet.

Fresno-area dealers still are trying to sell cars and trucks in a region where unemployment is higher than state and national averages, and a state budget deficit and a drought make things even harder.

"California [dealers] did not fare that well," said James Cagle, general manager of Future Ford / Kia in Clovis.

"We don't feel like we've hit the bottom yet in the overall economy situation ... but maybe we're closer than we have been."

All three Detroit manufacturers -- General Motors, Ford and Chrysler -- and the American units of foreign automakers, reported their October sales results on Tuesday.

GM, which went through a bankruptcy reorganization this year, sold more than 177,000 vehicles in October -- up 4% from a year ago for its first year-over-year gain in almost two years. Sales were up 13% over September 2009.

Officials at Ford Motor Co. said they sold more than 132,000 vehicles last month, 3% better than a year ago and 21% more than September.

And at post-bankruptcy Chrysler, now being run by Italian automaker Fiat, October sales were nearly 66,000 vehicles. That's off 30% from the prior year, but an increase of 6% over September.

Among Detroit's Asian rivals, Japanese automakers Toyota and Honda both saw sales last month slip from where they were a year ago. But they, along with Nissan, saw gains over September.

The largest year-over-year gains were reported by Korean automakers Hyundai and Kia. While their share of the American market is small compared with the Detroit and Japanese manufacturers, their sales grew much faster than those of their larger competitors.

Manufacturers predicted October would test how strong the market was without effects of the government's Cash for Clunkers program.

The rebates fueled a summer surge, but the program ended in late August. The industry staggered through a sluggish September.

"Cash for Clunkers was a huge shot in the arm for everybody," said Cagle. "But every time you have a huge shot in the arm, you're pulling customers from the future months."

Cagle said sales at his store last month were about 12% better than a year ago, when many consumers were frightened away from showrooms by the early effects of the financial meltdown and frozen credit.

Sales in September and October "were realistically about the same," he said

At Fresno Chrysler Jeep, the trend in October was about the same as Chrysler's national results -- down from a year ago, but slightly improved from September.

"Our October sales were down probably 30% from a year ago," owner Tim Finegan said.

Finegan said he was surprised about sales in the wake of Cash for Clunkers.

"It was shocking because I thought business would dry up and blow away, but people are still out there wanting something fresh," he said. "They're taking advantage of incentives that are being offered without the government money."

Bill Hedrick, owner of Hedrick's Chevrolet in Clovis, said his October sales were "about status quo" compared with both a year ago and the prior month.

Hedrick said the Big Fresno Fair in the first two weeks of October may have kept some would-be buyers out of showrooms.

"The fair always puts things into a bit of a tizzy here," he said.

Local dealers said the Valley's economic stress means new-car sales here are bound to be different from what manufacturers report nationwide.

"Fresno County is different than the rest of the state," Hedrick said. "It's tough to gauge. The water crisis here has everybody a little beside themselves."