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June Caps Six Months of Higher Sales for Auto Dealers

Orange County auto dealers saw higher sales every month in the first half of the year, with June seeing the biggest jump.

Registrations with the state, a barometer of sales, were up 46% in OC from a year earlier to 9,647 autos in June, according to the Orange County Automobile Dealers Association of Newport Beach.

Nearly every brand saw a big jump in June sales.

South Korean automakers Hyundai and Kia, which have their U.S. bases in OC, carved out more market share in the downturn and continued to boost sales in the county.

Hyundai was up 140% to 537 autos sold in June. Kia was up 10% to 182 autos.

The county’s top two brands also were up. Toyota rose 36% to 1,906 autos, while Honda was up 47% to 1,296.

After Toyota and Honda, Mercedes-Benz had the third highest registrations in OC in June. It and the two other top luxury brands improved sales in the month.

Mercedes-Benz was up 62% to 682 autos. Lexus was up 78% to 536 autos. BMW was up 28% to 451 autos.

The challenge for luxury automakers is coming out with smaller models to meet fuel standards for 2016, said James Bell, executive market analyst for Irvine-based Kelley Blue Book Co.

“They have to go down in engine size and still maintain the aura of luxury,” he said.

That means design is going to be even more important.

“It really becomes an issue of style again,” he said.

Nationally, Audi is rivaling Mercedes, BMW and Lexus in the luxury market, Bell said.

“In the U.S., Audi evened the score between Mercedes and BMW and they’ve done it with much less incentive spending,” Bell said.

But Audi still has a way to go in OC. For June, sales were up 90% to 170 autos, well behind the luxury segment’s big three here.

For luxury dealers, boosting “near luxury” sales in the immediate future will be challenging.

A near luxury car is a BMW 3 Series, a Mercedes-Benz C-Class, or a Lexus IS 250, which go for $35,000 to $45,000.

The bulk of near luxury sales traditionally have been leases.

“Leasing is ingrained into the luxury car market,” Bell said.

But tighter credit has had an impact on leasing.

The other challenge for luxury dealers is that many of the traditional features found on their vehicles now are standard on others, Bell said.

For the next 18 months, the dealers association forecasts a “relatively weak, but growing” new auto market. High household debt, unemployment, job security concerns and tight credit still are weighing on sales, according to the association.

Lamborghini Newport Expanding

Lamborghini Newport Beach, owned by the principals of Ferrari & Maserati of Newport Beach, outgrew the Huntington Beach space it opened this year and has moved to Harbor Boulevard and Victoria Street in Costa Mesa.

Now it has outgrown that space as well.

This year, the dealership plans to start building a Lamborghini showroom at its current service location for Lamborghini, Ferrari and Maserati cars on Baker Street in Costa Mesa.

Lamborghini Newport Beach became the latest OC Lamborghini dealer in January, after nearly two years without one here.

The original dealer, Lamborghini Orange County, closed after the company’s owner was charged with fraud. It was Lamborghini’s top U.S. dealer.

The owners of Lamborghini Newport Beach were tapped to take over sales here since they already had operated a Lamborghini dealership in Washington, D.C.

“We already had a relationship with Lamborghini because of the D.C. store,” said Donny Gath, general manager and one of the four owners of Lamborghini Newport Beach.

Lamborghini is the second exotic car dealer to open this year.

San Carlos-based Tesla Motors Inc. also opened a dealership near Ferrari & Maserati on Pacific Coast Highway in Newport Beach.

Lamborghini doesn’t exactly compete with Ferrari, according to Gath.

Gath describes Lamborghini customers as “a bit younger than the Ferrari buyer and a little bit crazy, a little less conservative,” he said.

The owners of Lamborghini Newport Beach also operate Costa Mesa-based iLuxCars.com, a wholesale site for dealers to buy luxury and exotic cars.

Gath’s been in the car business since high school. His first job was as a technician for Fletcher Jones Motorcars in Newport Beach.

He was there for six years before becoming a salesman at another Mercedes-Benz dealer, House of Imports in Buena Park. He helped start iLuxCars nine years ago.

At Fashion Island

French organic cosmetics store Melvita has opened a store at Fashion Island, its third in the U.S.

The company was started in 1983 by biologist and beekeeper, Bernard Chevilliat. Its products are made of honey and other natural ingredients.

Jonathan Adler, which sells home decorations, is expanding into a larger space at Fashion Island in late summer.

The retailer, which opened at the Newport Beach shopping center in late 2009, plans to stay open in its 900-square-foot spot until it moves into a 4,300-square-foot space in the Neiman Marcus-Bloomingdale’s Courtyard.

San Diego-based furniture store Kreiss Corp. has opened at Fashion Island. Kreiss has 20 showrooms in North America.

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