The tone of this year’s National Automobile Dealers Association meeting late last month in New Orleans was serious and focused.
“It’s an industry suffering more than others,” said John Sackrison, executive director of the Orange County Automobile Dealers Association of Costa Mesa.
Sackrison met some of his counterparts at the gathering to share ideas. Right now there are more questions than answers, he said.
“What’s going to come next?” he said.
As the convention closed, President Obama’s call to review a bid by California and other states to adopt tougher emissions standards was welcomed by automakers as a first step to developing one national standard, according to the Washington, D.C.-based Alliance of Automobile Manufacturers, made up of 11 domestic and import automakers.
There are three chefs in the kitchen when it comes to emission standards, according to Gloria Bergquist, vice president of the trade group.
There’s the federal Environmental Protection Agency. There’s California, the country’s largest auto market, which has called for the toughest regulations. Then there’s the federal Department of Transportation.
“We’re wondering, who do we follow?” Bergquist said.
Since the 1960s, California has been allowed to pursue its own emissions standards, with other states being given the option of following federal or California rules.
“Let’s all agree with what the rule is,” Sackrison said.
But it was the economy that was front and center at the auto industry gathering.
Alan Mulally, chief executive of Ford Motor Co., gave the keynote address. Mulally said he expects the pending stimulus package to bring an upturn in auto sales in the second half of the year.
Ford cut 269 dealers last year, according to the National Automobile Dealers Association’s AutoExec magazine.
Dealers at the meeting talked with automakers and attended workshops on a range of issues including getting through the credit crunch and maintaining profitability in a downturn.
Some other bigwigs in attendance: Rick Wagoner, General Motors Corp. chief executive; Jim Lentz, president of Toyota Motor Sales USA Inc.; and Jim Press, Chrysler LLC vice chairman and president.
Former presidents George H.W. Bush and Bill Clinton also spoke at the event.
At this point, dealers largely are at the mercy of banks, Sackrison said. Some dealers are reporting they could sell a lot more cars if more customers could get financing, he said.
Credit still is hard to come by for those without above-average credit, Sackrison said. That continues to dampen car sales, he said.
Dealers also are being affected by volatile prices for used autos.
With lower gas prices, sport-utility vehicles have gone up in price. Economical cars, such as the Prius, have gone down. In October, a used Prius was priced at about $20,000. Now it’s about $16,000.
The National Automobile Dealers Association’s economist Paul Taylor predicts 12.7 million in national new auto sales this year, which is slightly down from 13.2 million in 2008.
Taylor’s estimate is on the high end. Some estimates have been as low as 10 million new auto sales.
The first six months of 2009 are expected to look like the fourth quarter, according to Sackrison. After that, there could be an uptick, he said.
“A lot of the dealers are getting their costs in line with new levels of sales,” he said.
A handful of Orange County dealers could close this year, compared to last year when about 10 closed, Sackrison said.
South Coast Events
South Coast Plaza’s 2009 events calendar is as full as it was in 2008. But it has combined two events into one, bumped one and added two.
The Costa Mesa shopping center added the Fascination of Orchids in September, an event sponsored by Fascination of Orchids Inc., a nonprofit group. It also added an Easter bunny visit in March and April.
South Coast Plaza combined its tree lighting and Santa’s arrival event into one event on Nov. 19.
Off the calendar is the center’s June event, the summer food and wine festival.
A holiday shopping kickoff,the Angelitos Shopping Card fundraiser,was moved up to October instead of November.
The shopping center will hold its annual Festival of Children in September as always. Its Southern California Spring Garden Show is set for April 23 to 26.
A food and wine festival, which benefits Second Harvest Food Bank, is slated for Oct. 15. The event is a slight variation on South Coast Plaza’s food, wine and microbrew festival held last October.
The annual pumpkin and pancakes event, to benefit nonprofit Court Appointed Special Advocates, will be held Oct. 25.
