Still on the lot

Monday, October 15, 2007
Seven auto dealerships line Siemers Drive in Cape Girardeau. (Kit Doyle)

Reports from area new car dealers trying to buck a national sales slump show many are having trouble in maintaining last year's results, while others seem unlikely to match their 2005 figures.

Of 18 new car dealerships operating in a four-county region of Cape Girardeau, Perry, Bollinger and northern Scott County, 11 have reported sales to the Missouri Department of Revenue at a rate likely to result in a decline in sales compared to 2006. For seven dealers, it would be the second year in a row of declining sales.

Three dealers are on a pace to sell more than 2006, but fewer new cars than in 2005.

Required to report

Each auto dealer in Missouri must report sales regularly to the state Department of Revenue, which posts the figures on the Internet. According to those reports, last updated by the department Oct. 3, the 16 new car dealers in the area have sold 4,497 new cars this year. At that pace, the dealerships could expect to sell about 6,000 new cars in 2007.

Last year, the same dealers sold 6,314 cars. In 2005, the figure was 7,583.

The estimate of this year's likely sales was computed by the Southeast Missourian. The number could be off if dealers aren't keeping up with their reporting requirements, which sometimes occurs, said Beth Harris, senior programmer analyst for the revenue department.

"They are supposed to report on a regular basis," she said. "Many have, some have not. Some may be a month, or even three or four months behind."

Most new car dealers report electronically, she said, which keeps the figures for new cars up-to-date. Many used car dealers, especially smaller ones, file paper reports.

"Now we are getting a lot more online," Harris said. "My guess is that more are keeping it up to date quicker."

Trying to match 2005

Auto sales nationwide hit a record level in 2005 as automakers sought to outbid each other for customers. Zero percent car loans for 72 months, coupled with "employee pricing" promotions, spurred many regular new car buyers to make a purchase before they were otherwise ready, said Darren Garner, general manager of Auffenberg Chrysler in Cape Girardeau.

"It was just a tremendous time for incentives and it tipped a lot of people's buying cycles," Garner said.

The latest national sales figures show that the three big U.S.-based manufacturers -- General Motors, Ford and Chrysler -- are selling fewer cars and light trucks this year than in 2006. Ford sales are down 15.2 percent.

Meanwhile, Japanese and Korean automakers -- Honda, Toyota, Nissan, Mazda and Hyundai -- are all selling more than last year.

One dealer likely to buck the national trend is Ford Groves in Cape Girardeau, which is on a sales pace to exceed last year's 502 new cars sold. Gene Dewrock, assistant manager, said customers in this area like some of the new products the company is making, such as the "crossover" vehicles that combine aspects of a sport utility vehicle with carlike handling.

Customers are also responding favorably to the reintroduction of the Taurus nameplate, Dewrock said.

"Our trucks have always sold," Dewrock said. "We have always led in trucks and SUVs. But we are back in cars, and it has really been good to us."

Tough competition

New car dealers hold franchises from manufacturers allowing them to sell particular brands. Some area dealers hold the only franchise for their labels in the area, such as Cape Honda or Coad Toyota. Others have more direct competition, with Chrysler makes sold at Auffenberg Chrysler in Cape Girardeau, Keller Motors in Perryville, Mo.; Chevrolets sold by Keller, Coad in Cape Girardeau and Crown Chevrolet in Marble Hill, Mo.; and Fords sold at Ford Groves in Cape Girar-deau and Jackson, Bening Ford in Perryville as well as at Lutesville Motor Co. in Marble Hill.

But regardless of whether they have direct competition in the area or whether customers must travel to Dexter, Mo., Poplar Bluff, Mo., Sikeston, Mo. or even St. Louis or Memphis, Tenn., competition is fierce to land and keep customers.

"It is important to be getting your market share," said Shane Morris, general manager at Coad Toyota. "With Chevrolet and Toyota combined, we have market share."

Dealers realize customers are using the Internet, checking prices at other dealers and, in most cases, visiting other dealers before arriving on their lot, Garner said. To make the sale, a dealer must offer the best deal, whether it is extras on service or the best price, he said.

"We all work off the same cost," Garner said. "It is just a matter of giving the customer the most for the money."

Once customers make a purchase, dealers have to work to keep them happy, Garner said. "The repeat buyer is the heartbeat of your business," he said. "In today's market, the way to do business is taking care of your customer."

Going elsewhere

At Ford Groves, sales staff feel the pressure of having two other Ford dealers in the area as well as competition regionally in Southeast Missouri and beyond, Dewrock said. "We are sitting here with St. Louis 120 miles to the north and Memphis 180 miles to the south," he said. "We have got to stay competitive and we can match or beat anybody's deal in St. Louis or Memphis."

Dealers in the area's market sell mainly the lower- and medium-priced cars. There are no dealers of such luxury labels as Infiniti, Lexus, BMW or Mercedes in the four-county area.

Whether it is the cost of obtaining the franchise, or the paucity of potential buyers for such labels, buyers must travel at least as far as Marion, Ill., or Paducah, Ky., to visit dealers for those brands.

External boosts

Heading into the final three months of the year, dealers are relying on national incentive and rebate campaigns to help spur sales. Ford is offering zero percent interest for 60 months or up to $8,000 in rebates, Dewrock said. Chrysler has a similar offer, along with discounted leasing rates and a new lifetime powertrain warranty, Garner said.

Dealers are also hoping that crop prices, which are substantially higher than 2005, could spur sales to farmers and their families.

"That means a lot to us in this area," Dewrock said. "It means a lot when the farmers do well. The wife gets a new town car and the husband gets a new truck."

When the final figures are counted -- Harris said recording and posting the figures from reports filed on paper can take until March in some years -- dealers will check to see where they rank with their competitors from other labels.

Some will make their status as a top dealer of one brand or another a selling point in their advertising campaigns. Others, however, will emphasize customer satisfaction. "We have always been the type where you kind of keep your business to yourself and don't brag about how great things are," Morris said. "We just want to be consistent and take care of the customers."

rkeller@semissourian.com

335-6611, extension 126

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