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Thursday, Mar 28, 2024

Truck Sales Down, Luxury Brands and Fuel Sippers Racing Off the Lot

Auto sales are depressed, but local car dealers aren’t blaming high gas prices. With sales down 14 percent statewide this year, through April, compared to the same period last year, they’re blaming the lagging housing market for the drop. Real estate contractors aren’t buying as many trucks to carry their tools to construction sites, and some nervous homeowners are putting off buying big-ticket items like cars because they can’t sell their homes and are worried about plummeting prices and rising interest rates, said Marc Cannon, senior vice president of communications with Florida-based Auto Nation. Auto Nation is the largest auto retailer in California, with sales of 600,000 cars a year. Cannon said he has noticed plummeting truck sales since July. “All of California is really struggling along,” Cannon said. “We are cautious right now with our outlook for the rest of the year. We are hoping to see it stabilize, but right now it’s hard to predict. We don’t see recovery in the second quarter.” With gas prices inching toward $4 a gallon, however, Cannon said there has been a trend of people trading in their gas-guzzling vehicles for CUVs, or car-based SUVs, which are more fuel-efficient. Although more car buyers are considering hybrid vehicles, not many people are trading in their cars for hybrids, Cannon said. Santa Clarita Valley’s “Auto Row,” located on Creekside Road in Valencia, has seen less foot traffic as well, but some car brands are showing stronger sales than others, Cannon said. More fuel-efficient, Asian-brand vehicles have had stronger sales overall than American brands. “GM is holding on,” Cannon said. “Premium luxury cars are hanging in there. Chrysler is down. The Caliber is doing well.” According to Don Fleming, president of the Santa Clarita Valley Auto Dealers Association and owner of Valencia Acura on Auto Row, sales throughout the auto mall as a whole are slacking but not substantially. “We’re selling cars, but business is down a little bit,” he said. “We have seen a slowdown, but I’m not sure gas prices have affected sales yet. If you live in Southern California and you commute, you gotta buy gas.” The Acura dealership’s medium-sized SUVs and smaller RDX SUVs are selling the most. “Certain models of our cars are selling. Certain models are not,” Fleming said. Although gas may not yet be affecting auto sales, it is starting to affect the types of cars consumers are buying. Fleming said he has noticed some owners of larger SUVs looking to trade in their vehicles. “It looks like people are trying to find ways to save money,” he said. As such, Lexus-brand automobiles are doing well since they manufacture a hybrid, Fleming said. To that end, some dealerships that offer smaller, gas-efficient SUVs and hybrids are seeing a spike in sales. Tim Mendenhall, general manager of Saturn of the Saturn Clarita Valley, said gas prices are helping his business. “As gas prices go up, we do better,” he said. Nationally, sales at Saturn dealers increased 29 percent each month over last year. According to Mendenhall, sales at the Santa Clarita dealership are even better than the dealership is doing nationally. The dealer’s small SUV, the Outlook, has been selling out because it gets 26 miles per gallon and its Saturn Aura, which gets 30 miles per gallon on the freeway, has been selling well also, Mendenhall said. In addition, the dealer’s new hybrid vehicle, which gets gas mileage in the mid-30s, recently sold out and the dealer had to order more. Due to demand for its hybrids, “We’ll have more green vehicles in 2008 than any other manufacturer,” he said. Although Saturns used to attract many first-time buyers, many people are now trading in their Lexuses and BMWs for Saturns, Mendenhall said. But not everyone has been following suit. According to Tim Smith, owner of Bob Smith BMW MINI in Calabasas, “BMW sales are doing fine. It looks like right now we’re ahead of last year’s pace by 3 to 4 percent. I think there’s a lot of enthusiasm for the BMW MINI.” According to Smith, the MINI Cooper, gets gas mileage in the 20 mpg to 30 mpg range. “I think people are putting emphasis on fuel economy,” he said. According to Bert Boeckmann, owner and president of Galpin Motors, who owns dealerships in both the San Fernando and Santa Clarita valleys, “California has slowed down more than the rest of the nation. The San Fernando Valley is no worse off than the rest of the nation.” Nationwide, certain areas have been hit harder than others, Boeckmann said. But nationally, auto sales are “pretty much the same.” Because people are putting off purchasing bigger trucks, the sale of Fords in California are down more than they are in other areas in the country. According to Boeckmann, Galpin sales in the San Fernando and Santa Clarita valleys are up due to the opening of a new Honda store last year. Without the new store, sales would have decreased 7.2 percent at the Galpins in both valleys. Boeckmann predicts sales will increase in the summer, as they normally do. As for the rest of the year, “I think we’re going to continue somewhat on the same track,” he said.

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