Increasing confidence about jobs is spurring sales at Orange County auto dealers, which have seen six consecutive months of sales increases.
“People have pushed off the purchase of a vehicle because they thought they might not have a job,” said John Sackrison, executive director of the Newport Beach-based Orange County Automobile Dealers Association. “Now, two and a half years into the downturn, consumers have that confidence to go out and make a purchase.”
February new auto registrations from the county—a barometer of sales here—were up 49% from a year earlier to 8,727 autos, according to the dealers association’s most recent report.
That’s one of the biggest increases since before the recent recession.
March sales are expected to show more improvement.
For the year, sales in OC are expected to be up nearly 13% from 2010, with close to 125,000 vehicles sold.
That would mark the second year of double digit gains following the deep rut of 2009, when sales fell well below 100,000, the lowest total in more than 30 years, according to Sackrison.
The expected gains still would leave dealers well off their peak in 2004, when 197,041 new vehicles were registered in the county.
“It’s definitely come back since September, no doubt about that,” said Garth Blumenthal, general manager for Newport Beach-based Fletcher Jones Motorcars, the top dealer in the nation, according to Ward’s Auto Dealer, a trade publication. “I’d like to see it happen for a little longer and a little stronger.”
Fletcher Jones Motorcars’ new auto sales were up 21% for the 12 months through March, Blumenthal said.
Sales are expected to continue to rise in the spring months, though he said he doesn’t anticipate any significant hiring this year.
New Models
New Mercedes-Benzes should drive sales for the second half of the year, according to Blumenthal. Germany’s Daimler AG has about five Mercedes launches this year, including the C-Class coupe and its pricier CLS with a new body style.
“The overall picture is definitely looking up, but we’re still cautiously optimistic,” Blumenthal said.
Other luxury dealers have seen sales increase in recent months.
BMW dealers saw sales rise 15% to 950 for the first two months of the year. Lexus dealers were up 1% to 931 autos through February. Jaguar was up 21% to 63 autos. Porsche sales rose 39% to 118 autos.
Most automakers with American operations based in Orange County also have seen a boost in sales here.
Fountain Valley-based Hyundai Motor America Inc. and sister company Kia Motors America Inc. in Irvine—both part of South Korea’s Hyundai Kia Automotive Group—had record sales in 2010 and continue to see the biggest percentage gains of all brands.
Kia dealers sold 255 autos in February, an increase of 454% compared to February 2010. Hyundai dealers sold 649 autos in February, an increase of 180%.
Irvine-based Mazda North American Operations, part of Japan’s Mazda Motor Corp., was the only brand to see sales decline in the county in March, off 19% to 165 autos.
Brea-based American Suzuki Motor Corp., part of Japan’s Suzuki Motor Corp., sold 14 autos in the county, a 133% increase.
Cypress-based Mitsubishi Motors North America Inc., part of Japan’s Mitsubishi Motors Corp., boosted sales 54% to 100 autos.
For all of Toyota Motor Corp.’s recall woes, its dealers still sell the most autos in OC.
In February, Toyota sales were up nearly 48% to 1,680 autos.
Japan
It’s not certain how the earthquake and resulting tsunami disaster in Japan might affect Toyota and other Japanese auto dealers.
Toyota recently warned dealers of a possible shortage of vehicles in the U.S. this summer.
“Just how big the problem will become remains to be seen, but there is no doubt that supply of vehicles built in Japan will be severely curtailed in the next several weeks,” Jack Nerad, analyst with Irvine-based Kelley Blue Book, wrote in a recent report.
Dealers of U.S. automakers also are seeing sales increases.
Dealers for General Motor Co.’s Chevy brand have had a hit with the compact Chevy Cruze.
Nationally, it outsold the Toyota Corolla in March.
“It’s a very good looking vehicle,” said Bruce Hamlin, owner of Santa Ana-based Guaranty Chevrolet.
The Equinox sport utility vehicle and the sporty Camaro also are doing well, according to Hamlin.
In all, Guaranty Chevrolet sold 153 vehicles for January through March, more than twice as many from the same period a year earlier.
Guaranty Chevrolet and other dealers that handle the General Motors brand have benefited from the automaker’s moves to trim its dealers, leaving less competition in OC and other markets.
Hamlin closed his Chevy dealership in Tustin last year and moved the vehicles and most of his employees to Santa Ana.
Jon Gray, owner of Orange Coast Chrysler Jeep Dodge in Costa Mesa said he and many fellow dealers have stopped cutting and gotten back to selling.
“There has been a shift from playing defense to offense,” said Gray, the new president of the Orange County Automobile Dealers Association.
In the past several months, Gray has hired about 20 to 30 people across all departments, but mostly office staff.
“When you’re selling lots more someone has to process all of the paperwork,” he said.
Good Q1
Sales for the first three months of the year at Orange Coast Chrysler Jeep Dodge were far better than the same period in 2010, he said. The dealership is the top selling Chrysler dealer in the state.
The Jeep Grand Cherokee and the Dodge Challenger, a sedan with muscle car styling, have been selling well, Gray said.
In March, Gray opened Orange County’s first Fiat dealership in Costa Mesa and has plans for another Orange Coast Chrysler Jeep Dodge dealership in San Juan Capistrano in June.
In about two weeks, Orange Coast Fiat sold 25 Fiat 500s. The Italian-designed Fiat 500, a mini hatchback with retro flair, is competing on price, gas mileage and design. That puts it up against the pricier and style conscious Mini Cooper and subcompacts, such as the Toyota Yaris and the Honda Fit.
Tuttle-Click Automotive Group also is set to sell Fiats in Irvine.
