Local car sales on the rise as consumers gain confidence in economy

Denise Holifield of Sikeston, Mo., spent a sunny Saturday afternoon in Cape Girardeau shopping for a new car with her husband and daughter. She used to trade in her car in every two years, but she waited longer this time -- about three and a half years -- before thinking of trading. She's not the only one.

Pent-up demand, as a result of people who put off car purchases as the economy continued to struggle last year, has 2011 auto sales off to a successful start at auto dealers across the nation and locally.

Lower unemployment and increased consumer confidence are also contributing to stellar sales.

"The stock market is going up in the right direction. There's a lot more stability than there was a year ago," said Gene Dewrock, assistant manager at Ford Groves in Cape Girardeau. "Things are getting better; they're by no means great, but they're going up, not down. It makes people feel more relaxed about spending their money."

Cape Girardeau auto dealers have sold 1,455 cars so far in 2011, according to motor vehicle franchise dealer reports filed by 12 county dealerships with the Missouri Department of Revenue.

There are also fewer dealerships open now than there were before the 2008 recession, due in part to corporate restructuring at Detroit's Big Three automakers: General Motors, Chrysler and Ford.

There are about 4,000 fewer auto dealerships in the U.S. compared to six years ago, Urban Science reported. The 17,659 dealerships still open recorded profit gains last year, the study showed.

"There are not as many dealers, but the ones that are surviving are doing well," said Mark Van Matre, owner of Van Matre Buick GMC Cadillac. His dealership added Pontiac and GMC in 2007 when Cape GMC Pontiac closed and Cadillac in 2008 when Crown Cadillac closed.

Hummer, Pontiac, Saturn and Mercury, all discontinued brands, saw the most franchise closings in 2010 across the country.

The average number of new vehicle retail sales per dealership, which rose 16 percent to an average of 656 in 2010, could jump to 745 sales per dealership in 2011, according to Detroit-based auto consulting firm Urban Science's annual Automotive Franchise Activity Report.

Of the 12 franchise dealers filing reports with the Department of Revenue, average dealer sales in Cape Girardeau County in 2010 were higher than the national average at 908 vehicles. Total vehicle sales in the county among these dealers was 10,896, an increase of 9.4 percent from 2009.

Sales so far in 2011 are on trend for local dealers to see another increase in sales this year. Low interest rates and dealer incentives are also attracting buyers right now, several dealers said.

Ford Groves had the best February sales it's had in five years, Dewrock said. January was almost a record-breaker.

Nick Underwood, general manager of Lutesville Motor Co. in Marble Hill, Mo., said his dealership's new vehicle sales for January and February are double what they were during those same months last year.

"Our business is cyclical. Whenever it rains, it pours. When it doesn't it's dry for a while," he said. The National Automotive Dealership Association forecasts U.S. sales in 2011 may increase 11 percent to 12.9 million. While an improvement, it's still about 23 percent less than the annual average from 2000 to 2007--prior to the 2008 recession, the association reported.

One of Cape Girardeau's newer dealerships, Morlan Chrysler, which opened in 2009 at the former Saturn dealership, has seen its sales increase 30 to 40 percent compared to one year ago, said Jason Todt, general manager.

Chrysler's 14 new 2011 models are attracting shoppers to his lot, he said.

"They've invested a lot of money in developing these new models and we're getting a lot of interest in them," he said.

A total of 29 new vehicle model launches are planned this year, according to Urban Science.

Local dealers say despite recently rising gas prices, they haven't seen an influx of customers looking for more fuel-efficient cars.

Trucks, SUVs and crossover vehicles remain the most popular with Southeast Missouri car buyers.

"I haven't seen a lot of people running in to buy a Ford Fiesta," Dewrock said of the model that has a 40-mpg highway rating.

If prices continue to rise through the summer, that may change. But it will likely take gas prices higher than $4 a gallon to motivate customers to focus more on fuel efficiency, said Todt. The higher monthly payments buyers will have to make for a new fuel-efficient car often negate what they would save at the pump, he said.

Holifield is more concerned about having a vehicle with a third-row seat and room to transport her daughter and her friends than with gas mileage.

"I don't have to drive very far for work," she said. "If I did, then I might feel differently."

mmiller@semissourian.com

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Pertinent address:

Siemers Drive, Cape Girardeau, MO