Auto sales in Fresno, Valley follow national upswing

A few years ago, economic uncertainty had car buyers in Fresno and across the country sitting squarely on their wallets. The recession prompted would-be customers to wring a few extra years and as many miles as possible out of their paid-off vehicles rather than committing to a new-car purchase or lease – and another three to six years of car payments.

But for auto dealers locally and nationally, the good times are back with a vengeance as a growing number of buyers, buoyed by an improving economy, satisfy a hankering for a new set of wheels.

“It’s been phenomenal,” said Tim Finegan Jr., vice president of family-owned Fresno Chrysler Dodge Jeep Ram. “The economy is on an upswing, car manufacturers are building great cars, and financing is really, really good.” Between the family’s two dealerships, including Clovis Chrysler Dodge Jeep Ram where his brother Brian Finegan is the general manager, sales this fall have “just been huge, crazy.”

Finegan said the upbeat mood among the Valley’s auto dealers was infectious at the recent Central California Auto Show at the Fresno Convention Center. “You could not believe how big the smiles were on everyone’s faces,” he said. “Business is back. It’s fun again because now we can take care of people, get financing done, get people into new cars. … It’s been a steady flow that’s just getting stronger and stronger every quarter.”

The reticence among customers started to loosen up a couple of years ago, after the worst effects of the recession faded. Dealers across the region began seeing renewed signs of life about 2011, “and we could really kind of see things changing starting in 2012-13, and it’s been climbing since,” said Scott Biehl, president of the Fresno-Clovis New Car Dealers Association and owner of Mercedes-Benz of Fresno.

Biehl said customer interest was evident for all levels of vehicles at last weekend’s auto show, which the association co-sponsors. “We know when we get that kind of turnout, visitors to the car show are looking for the new technology,” he said. “They’re ready to upgrade their vehicle and get into something new. Interest rates are still very inexpensive, and there are some good incentives out there.”

As unemployment rates fall in the Valley and the region’s economy continues to perk up, car buyers are getting more confident in getting into the market again. “Consumers are having more faith in themselves and in the community,” said Cal Sager, general manager at Lithia Ford Lincoln in Fresno.

Finegan and Sager said automakers are helping to fuel the demand with fairly aggressive incentives, including low interest rates and rebates. Chrysler recently announced that it is offering 0 percent financing for up to 75 months – more than six years – for qualified buyers, Finegan said. But not every manufacturer is buying into the zero-interest strategy.

“It’s always a fine line, but the companies have always been aggressive,” said Sager, who came to Fresno to run Lithia’s Ford franchise after years working for dealerships in the Bay Area.

“They’re always enticing people, whether it’s with direct rebates or low interest rates. … Now they’re more aggressive with rebates to help people with a down payment or who are in an upside-down situation where they owe more on their (old) vehicle than it’s worth.”

Sager said sales at his dealership so far in 2015 are up significantly compared to last year. “We went from 105 cars a month on average (in 2014) up to 250 cars,” Sager said of combined sales of new and used vehicles. “We’re estimating to do 300 a month in 2016.”

Interest also has been high among upper-echelon buyers of luxury cars, said Biehl. “This year our new car sales are up a little over 25 percent over last year, and last year we were up about 25 percent as well,” he said. “You can see just in the last couple of years, the movement has been pretty good.”

Biehl added that luxury dealers weren’t immune from the recession’s effects, even though most of their high-end customers could still afford their products.

“Our main buyer still kind of follows what the economy is doing,” he said. “The issue is, if a CEO was making $2 million before, and now he’s only making $1 million, he still wants to drive a nice new car, and he can still afford it. But if his company is laying off people, he doesn’t want to show up on Monday with a new Mercedes. So a lot of those buyers waited.”

“Now we’re seeing more companies having some good growth and starting to expand, so as long as that continues, I think we’ll be OK,” he said, adding that November and December typically are the busiest months of the year for luxury car dealers.

The trend in Fresno reflects what automakers are experiencing nationwide. Ford, Fiat Chrysler and General Motors, the Big Three U.S. automakers, all reported October sales in the U.S. that were better than any October in at least a decade, while Asian imports Toyota, Honda, Nissan, Hyundai and Kia had their best Octobers ever last month. Overall, sales of all brands combined were up more than 13 percent from October 2014, led by General Motors with almost 263,000 vehicles sold across its Chevrolet, Buick, GMC and Cadillac nameplates.

Ford Motor Company’s Ford and Lincoln brands piled up October sales of almost 214,000 cars and trucks, while Toyota Motor Sales racked up more than 204,000 units sold across its Toyota, Lexus and Scion brands.

Fiat Chrysler reported that its Chrysler, Dodge, Jeep, Ram truck and Fiat vehicles sold a total of almost 196,000 vehicles. Other manufacturers with nationwide sales over 100,000 last month were American Honda (Honda and Acura brands) at nearly 132,000, and Nissan Group (Nissan and Infiniti brands) with more than 116,000 vehicles sold.

All of the major manufacturers – domestic as well as European and Asian imports, including luxury makes – saw their year-to-date sales climb from 2014 to 2015; for most, year-to-date sales have grown for at least two straight years.

This story was originally published November 28, 2015 at 6:59 AM with the headline "Auto sales in Fresno, Valley follow national upswing."