Sales for Orange County’s auto dealers are projected to get better in the second half of the year after slumping for the year so far.
Vehicle registrations for the first half were down nearly 19% from a year earlier. Registrations, a barometer of new auto sales, succumbed to a “near perfect storm” of high gas prices, rising unemployment and tight credit, according to a report from the Costa Mesa-based Orange County Automobile Association.
The No. 1 factor that’s holding customers back from auto purchases is excessive household debt, according to the report. Credit card delinquency rates are also increasing while homes are foreclosing.
Shoppers are focused on debt reduction.
The outlook for the rest of the year isn’t great, but there should be an improvement. For the second half, vehicle registrations are expected to decline 8.5% from a year earlier.
They’re expected to end the year at 142,908, down 14% from 2007.
Last year, the number of registered vehicles fell 9.2% to 165,919.
“The market will al-most certainly reach its cyclical low point in 2008,” according to the report.
Auto dealers can expect to see a “mild recovery” in 2009, with a projected 2% increase in auto registrations. A more significant turnaround is forecast for 2010.
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Kia concept vehicle: Kia registrations up 65% |
Nationally, this year is expected to be the first time in 15 years that sales fall below 15 million vehicles.
On the upside, now is one of the best times to buy a car.
Automakers such as Chrysler LLC are offering as much as 40% off the stick-
er price on certain models. Makers also are offering financing deals, including longer loans.
The strongest selling brands in OC in the first half were Kia, Volkswagen, Mazda and BMW’s Mini, reflecting the small car trend.
Kia was up 65% from a year earlier to 403 registrations. Volkswagen was up 18% to 1,625. Mazda was up 6% to 1,720. Mini was up 20% to 609.
By market share, the three domestic automakers saw a drop of 2.5 percentage points in the first half. Japanese brands were up 1.5 percentage points. South Korean brands were up 0.7%.
As expected, subcompact car sales surged for the first six months. The cars saw the biggest market share gains, by 8.5 percentage points.
Subcompact cars include the Honda Civic, which saw the largest number of
registrations, 3,518, in the first half. Toyota Corolla followed the Civic with 2,941 autos, followed by the Toyota Prius at 2,080.
Hybrid sales in the first six months made up about 5% of the OC market, compared to 2% in the first half of 2005.
Hybrid sales are poised to grow, ac-cording to the re-port.
The next biggest selling category, the midsize car, saw a boost of 3.4 percentage points in market share, followed by entry cars, up 1.5. Midsize autos include the Toyota Camry, which led the category with 5,098 autos, followed by Honda Accord with 3,180.
Toyota’s Yaris led the entry car category with 1,121 registrations, followed by the Honda Fit, with 631 registrations.
The biggest market share decliner was midsize luxury SUVs, which fell 2.9
percentage points, followed by full-size pickups, sinking 2.5 percentage points and luxury autos, down 2.5 and near luxury, down 1.7.
In the luxury category, Mercedes-Benz’s E-Class was tops with 1,323 autos
registered, followed by BMW’s 5-Series at 1,018 registrations. BMW’s 3 Series led the near luxury category with 2,166 regis-
trations, followed by Mercedes-Benz’s
C-Class with 2,025 registrations.
Mercedes-Benz, BMW and Lexus all saw big declines in registrations for the first half of the year, compared to the first half of 2007. Lexus saw a 29.5% drop to 3,854 autos, BMW saw a 23% drop to 3,536 autos and Mercedes fell nearly 18% to 4,409.
Burger Chic
Chicago’s Marc Burger, an upscale hamburger restaurant owned by TV chef Marcus Samuelsson, is expected to open this year inside of Macy’s at South Coast Plaza, according to Nation’s Restaurant News.
Furnishings Foreclosure
Some tenants at Costa Mesa’s South Coast Home Furnishings Centre can’t be pleased with the latest news out of the furniture shopping center.
The owners have defaulted on an $84 million mortgage with the center now in foreclosure.
South Coast Home Furnishings has had trouble since it opened in 2006,just before the housing slowdown.
A tough market prompted some tenants to take aim at the center’s developer and former owner. In late December, some complained that Irvine-based Birtcher Development and Investments Co.,which sold the property four months earlier,and management company PacificWest Asset Management Corp. of Costa Mesa hadn’t done enough to market it.
Birtcher developed the 20-acre, 300,000-square-foot property with Buchanan Street Partners of Newport Beach and sold it last year for $100 million to South Coast Home Furnishings Center LLC.
