AUTOZONE:
Luxury Car Sales Help Dealers Raise Revenue
By JENNIFER BELLANTONIO
Zero-percent loans and “cash-back” incentives helped keep U.S. auto sales rolling despite a weak economy and a soured Wall Street this past year.
And that scenario certainly played out here in Orange County.
The 20 largest dealers on this year’s Business Journal list saw a 9% gain in total sales to $2.8 billion for the 12-month period ended June 30, excluding Mercedes-Benz dealer House of Imports, which didn’t report figures for the prior year. The list ranks dealers by sales, which include cars, service, parts and other revenue sources.
New- and used-car sales also showed growth, jumping 5% to $2.2 billion. The average price of an auto increased 8% to $27,984 vs. a year ago.
But signs of a slowdown are there, too.
According to the list, new-car sales were up just 1% to 53,988 vs. an 8% gain last year, and a 16% gain in 1999. Used-car sales showed no percent change at 28,733 vs. a 7% gain in 2000 and an 8% jump a year earlier. (Prior-year lists carried sales information for the calendar year.)
Major automakers saw September sales rise 3.1% vs. last year to a seasonally adjusted annual rate of 16.3 million. That was well below August’s seasonally adjusted annual rate of 18.7 million.
Many of the dealers on this year’s list held their own for the 12 months ending June 30 and are optimistic about the rest of the year. (Total sales for Joe MacPherson Toyota in Tustin were estimates.)
The top-three dealerships were Mercedes-Benz sellers.
Fletcher Jones Motorcars in Newport Beach, which has taken the No. 1 spot for five consecutive years, posted a gain of 17% in total sales to $446.7 million. The dealer beat No. 2 House of Imports in Buena Park, a long-time rival, which reported $286.4 million in 12-month sales.
Fletcher Jones’ General Manager Garth Blumenthal said the dealership saw gains in its service business and new-car sales, which jumped 16% to 4,938.
“Every single month this year has been a record-breaking month for the dealership,” Blumenthal said. “The interest rates are the lowest they’ve been in 40 years,” he said.
Blumenthal expects the momentum to continue. Historically, he said September is a tough month for the stock market, but he is optimistic the economy will improve next year.
No. 3 Mercedes-Benz of Laguna Niguel is now in full swing after moving to its home on 11 acres about two years ago.
The dealership saw total sales increase 16% to $261.9 million. New and used cars sold at about the same rate. Pat Bolter, general manager and vice president, attributed the growth to lower-priced models that Mercedes-Benz is now offering.
“A lot of lower luxury buyers have now come into the Mercedes-Benz family,” Bolter said, noting that some of its cars start at $24,000.
The Laguna Niguel dealer expects to end 2002 with a 15% sales increase vs. last year, Bolter said.
No. 4 Toyota of Orange, the top performer in Orange-based David Wilson Auto Group, saw an 11% jump in sales to $190.5 million.
David Wilson owns several other dealerships in OC, including No. 10 Tustin Lexus, newcomers No. 15 South Coast Toyota and No. 16 Toyota of Huntington Beach, and No.17 Ford of Orange.
They showed mixed results. Tustin Lexus reported a 10% drop in total sales to $120.3 million. Wilson said the dealership was at capacity and he is looking to open a sister Lexus dealership in Irvine or Newport Beach. The results included a 21% decrease in new-car sales and a 17% drop in used-car sales.
Meanwhile, Toyota of Huntington Beach grew sales 1% to $88.9 million, while Ford of Orange saw a 5% gain to $87.1 million. South Coast Toyota saw sales improve 4% as it became part of the Dave Wilson family.
In all, there were seven dealers that reported double-digit gains, with No. 6 Irvine Toyota reporting the largest: a 37% jump in total sales to $165.5 million. The dealer had strong new and used-car sales, with new cars sold up 38% to 5,181 and used-car sales jumping 25% to 1,377. It moved up from No. 14.
Eight dealers posted single-digit gains while two reported losses.
No. 4 Toyota of Orange was tops in number of cars sold at 9,813,709 more than last year. The second highest was Fletcher Jones, with 6,683 cars sold.
Two dealers were dropped from the list because they didn’t qualify: last year’s No. 19 Tuttle-Click Tustin Dodge and No. 20 Allen Oldsmobile Cadillac GMC Truck.
