Clovis News

Car sales pick up at local dealers

After a long, slow winter, some local car dealerships are seeing signs of life: Sales are edging up at some dealerships, certified used-car sales are booming at another, and some saw a small rush as customers tried to beat a sales-tax increase last week.

The evidence in California is mostly anecdotal. State sales numbers for the first three months of the year will be released this month. But the local dealerships and California New Car Dealers Association report that they may have seen the first glimmers of light at the end of the tunnel in March.

"We're starting to see a beginning of a way out of this," said Brian Maas, director of government affairs for the association. "I think the hope among our members is that we've at least reached the bottom."

On a national level, March sales were 19.5% better than February -- spurred in part by areas of the country recovering from the housing crisis.

The industry still has a long way to go until it's healthy again. Nationally, sales still are running below last year's. The state association is forecasting a 15% drop in sales in California throughout 2009, on top of the 23% drop in 2008.

But when March is compared to dark months of January and February, things look brighter.

Sales at Honda North in Clovis have increased about 15% since January, said general manager Gary Revis.

"There's just more consumer confidence right now in the marketplace," he said. "Customers are not as afraid. They are not as apprehensive as they once were."

Credit is loosening up, and it's getting easier to get car loans, he said. Manufacturer rebates and other deals are knocking thousands off the price of cars, and low interest rates are also attracting buyers, he said.

And a smattering of good economic news that showed up in the stock market in early March probably helped consumers feel better about spending, Maas said.

At Lithia Ford of Fresno -- which also sells Mazda and Suzuki -- business picked up by about 10% in March compared with February. Sales manager Tony Swertfager said sales typically rise in the spring and summer when daylight lasts longer.

He said customers aren't holding off on their purchases anymore, especially when they see the discounts.

"A lot of people have realized it's not going to get any worse, and people don't want to wait any longer," he said.

Nationally, more cars are headed to scrap yards than are being sold new, said Paul Taylor, chief economist for the McLean, Va.-based National Automobile Dealers Association.

That may indicate pent-up demand that is about to be unleashed, because people still need cars to drive to work, said Maas with the California New Car Dealers Association.

Some places also saw an uptick in sales as customers raced to beat a 1% increase in sales tax that took effect Wednesday in California.

Pistoresi Chrysler Dodge Jeep in Madera sold five cars Tuesday, "which for us is pretty busy," said general sales manager Kevin Cavin.

That may lower April sales, however, as buyers already planning to spend were pushed into March, Maas said.

And when compared to last year, car dealers still are hurting.

Ford's February sales fell 48% and General Motors' plummeted 53%. Chrysler fell 44%. All new car sales for March were down 34.2% when compared to the same period last year.

Some dealerships are relying on other parts of their business to make up for those losses.

At Weber BMW in Fresno, new car sales still are struggling, but sales of used and certified pre-owned vehicles are "skyrocketing," said general manager Jerry Pajouh.

They've more than doubled this year compared to the same time last year, he said.

"A lot of folks are getting very savvy with their money due to the economic tough times," he said.

Shoppers often find that certified used cars are a better value than buying new, he said. The cars have between 10,000 and 30,000 miles and come with a warranty.

Most of the certified used cars the dealership sells are priced in the low $30,000 range or below.

Usually less than three years old, certified cars are inspected to ensure they don't have major accident damage and have been serviced regularly.

While the economy hasn't recovered yet, Pajouh said he has hope.

"I'm quite optimistic about the direction that we're going," he said. "Last year was a tough year for everybody. ... The confidence needs to be built back up, and I certainly feel we're on our way there."