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Friday, Dec 8, 2023

OC Auto Dealer Sales Down; Automakers Add Jobs

Orange County auto dealers saw their sales continue to slip, amid a rugged year.

Sales generated by the 28 largest dealerships here fell 2.9% to $4.1 billion for the 12 months through June 30, continuing a decline started last year and signaling the end of a seven-year growth streak.

2020 hasn’t been easy, but some have managed to navigate their way.

Subaru Orange Coast, at No. 27 and a new entrant on the list, notched the largest sales gain in the period measured by the Business Journal, up 15.9% to $57 million. Growth was seen in both vehicle sales and on the parts and service side of the business, noted Penske Automotive Group Controller Christine Koeller.

Vehicle sales were up 13.8%, while fixed operations rose 36%.

The relatively new dealership saw its first full year of operations in 2017 and has grown each year since, according to Koeller.

“It’s all about taking care of the guest; hard to do and easy to say as we are in the retail business and we measure everything daily, and it’s not instant gratification,” Penske Area Vice President Al Parajeckas said of the increase.

Wilson Automotive Group’s David Wilson’s Villa Ford also saw sales increase, up 14.6% after Ford of Orange was returned to Ford and shuttered earlier this year. That left one dealership in Orange as opposed to two and was responsible for the year-over-year increase.

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While some managed gains, others saw sales contract during the reporting period.

No. 25 AutoNation Infiniti Tustin reported sales down 32.1% to $57.9 million. New car sales at the Tustin dealer fell nearly 45% to 760 as used cars ticked up about 6% to 671.

No. 7 Newport Lexus, part of the Wilson Automotive group of dealers, was down 19.3% to $172.7 million. The decline was offset by the 21% increase by sister dealership Tustin Lexus, less than 7 miles away, the company said.

Newport Lexus saw revenue declines of 53% in March and April, while Newport Lexus saw a 47% drop in the same period—the onset of COVID-19—compared to the prior-year period, according to the company. Both dealerships have since seen revenue rebound and surpass last year’s levels.

Overall, 18 dealers reported declines in sales, eight saw gains and two entries on the list reflect Business Journal estimates.

Used car sales totaled 33,132 for the 12 months ended June 30, up 6.2% from the year-ago period.

New car sales, meanwhile, were off 9.5% to 57,945.

Along with the coronavirus, the dealers saw increasing competition via Tesla, which sells its vehicles via a retail model. The electric car company’s Model 3 was OC’s best-selling vehicle in the first half of the year, according to data from the Orange County Automobile Dealers Association.

The sales declines also came with some dealerships trimming their headcounts. Payrolls among OC auto dealers’ sales staff totaled 654 in September, down 11% from a year ago. Workers on the service side across OC’s largest dealerships also ticked down 4.5% to 1,312.

Dealers in the top five retained their status with Fletcher Jones Motorcars in Newport Beach in the No. 1 spot, notching a 3.8% increase in volume to $661.4 million. The dealership was the only one of its peers in the top 5 to see sales growth for the 12-month period ended in June.

The rest of the top five was filled out with No. 2 Crevier BMW in Santa Ana, No. 3 Toyota of Orange in Orange, No. 4 House of Imports in Buena Park; and No. 5 Mercedes-Benz of Laguna Niguel.

Automaker Moves

On the manufacturing side, OC automakers’ vehicle sales were down 6.6% to 3.2 million for the year ended June 30.

Their overall headcounts, the factor that determines their rankings on the Business Journal’s list, still saw growth of 2.8% to 2,465 workers in OC.

Mazda North American Operations of Irvine became the largest automaker here with 548 employees locally as of September. That’s down 3.5% from the year-ago period amid a 2.2% decline in vehicle sales for the automaker to 268,866.

Mazda replaced Irvine-based Karma Automotive LLC in the top spot as Karma fell to No. 4 after a wave of layoffs that were part of a restructure to diversify its revenue streams with business-to-business offerings in design, licensing and manufacturing.

The luxury electric automaker, as of last month, had a local headcount of 350, a 30% decline from the year-ago period.

Rivian Automotive LLC, with a growing presence in Irvine, ticked up four spaces on the list to No. 3 with a headcount of 400 here, good for a 300% spike as the electric automaker readies to bring its first vehicles, an SUV and truck, to the market next year.

The company revealed in the summer it had plans to redevelop the Laguna Beach South Coast Cinemas into a showroom space as part of a retail expansion plan that calls for 10 brick-and-mortar outposts open by the end of 2021.

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