Auto industry zooms back from slumpSeptember 13, 2013
By CANDY NEAL
Herald Staff Writer
Local car dealerships’ sales are following the national trend of being the best they’ve been since prior to the Great Recession.
Industry analysts say that overall August could be the best sales month since May 2007, when $3-a-gallon gasoline set off panic buying of fuel-thrifty vehicles. The Great Recession started that December.
LMC Automotive, an industry consulting firm, is predicting that total U.S. sales last month were close to 1.5 million, about 12 percent higher than a year ago.
“Ours sales are definitely up,” said Tony Uebelhor, owner of Uebelhor & Sons, which has dealerships in Jasper and Vincennes. “We seem to have a plethora of buyers.”
The company’s August sales of Toyota models were 27 percent more than July sales, Uebelhor said. For GMC models, that increase was 23 percent.
“I think the new products out there (are) driving up sales,” Uebelhor said. “And the fuel economy of the models is working in our favor. With the fuel prices creeping up, people are looking at fuel efficiency. So cars like the Prius, the Chevy Cruze and the Chevy Sonic are selling well.”
Toyota, Ford, Nissan, Chrysler and General Motors all reported double-digit U.S. sales gains in August as strong sales of pickup trucks and small cars led the industry toward its best month in six years.
Toyota posted the biggest gain, with sales up nearly 23 percent over August of last year. Nissan sales were up 22 percent, the best August in company history. At General Motors, sales were up almost 15 percent for the company’s best month since September 2008. Chrysler and Ford each reported 12 percent gains.
Ruxer Ford Lincoln’s sales manager Darren Mathies said that for August, Ford’s market in the Cincinnati, Ohio, region, which includes the Jasper dealership, has seen an increase of 22 percent from last August. Locally, that increase is 42 percent and for the year, 17 percent.
“It’s been very busy around here,” Mathies said. “We have cars in stock, but our inventory is down by 45 percent compared to normal. People are buying cars faster than we are getting them. Even the trucks are in high demand.”
Dave Luegers, co-owner of Bob Luegers Motors, said the Jasper dealership had a profitable August. “We’ve had good several months in a row,” he said. “In fact, the market continues to grow for Buick and GMC, with Buick up substantially over a year ago.”
Businesses also are gaining confidence and buying trucks to replace their aging fleets. Uebelhor said his dealerships sell lots of trucks to businesses, and he’s noticed that sales have increased as well. “A lot of businesses were putting off purchases because of the (looming) health care (mandates),” he said. “But now that that has been delayed a year, they feel like they can buy trucks. They have another year of breathing room.”
The delay he is referring to is the requirement that medium and large companies provide health insurance coverage for their workers or face fines. The mandate was delayed until 2015.
Local dealerships also are noticing that people are starting to trade in older cars.
“We are seeing that the fleet of used vehicles is continuing to age. We’ve seen an increase in the age of the models that come in” for a trade, Mathies said. “Because the age of the fleet is getting older, that tells us that people are keeping their vehicles longer.”
“We’re trading a high percentage of cars that have the higher mileage, like 100,000-plus, than we were 10 years ago,” Uebelhor said. “We get cars that have 200,000, 220,000 miles on it,” he said.
This follows the national trend of drivers holding onto vehicles longer, an industry research firm says.
The average age of the 247 million cars and trucks on U.S. roads hit a record of 11.4 years in January, the latest figures available from state registration data gathered by the Polk research firm. That is an increase from 2012’s 11.2 years, and nearly two full years older than in 2007, before the start of the Great Recession, according to Polk records.
People are keeping their cars because the quality is so much better and they are trying to avoid the monthly payments, said Mark Seng, a Polk vice president. The annual percentage of cars and trucks sent to the scrap yard has dropped 50 percent since the recession, he said.
“Cars are just lasting longer,” he said.
Uebelhor agreed. “People will finally trade in because the car is on its last legs. But that just shows the quality of the car,” he said. “They’re built better, so they last longer and thus people can keep them longer.”
The Associated Press contributed to this report.
Contact Candy Neal at email@example.com.
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