One of the many effects of the dramatic drop in the stock market is the corresponding drop in vehicle sales being felt by dealerships every where.
“With a combination of credit restraints and the fear factor of the crash of the stock market, people have essentially stopped car sales,” Oxford’s Chandler Motor Co. President Lawrence Chandler said.
In a recent report from Reuters, in the coming months as many as 3,800 U.S. car dealerships could fail, or nearly one in five across the nation.
As a reminder of the times, an automotive magazine is sprawled across Chandler’s desk with the bold headline, “The Great Collapse.” Consumers and lenders seem to be tightening their belts more these days, he said.
“People who are credit worthy are not buying because they have experienced significant losses in their net worth,” Chandler said. “And people who have lower credit scores who could normally get financing are now finding the door is closed.”
At Cannon Motor Co., 1801 W. Jackson Ave., new car manager Randell Naramore said Cannon is feeling the same effects.
“It’s a lot slower and most of all of your lenders have gotten a lot tighter on who they’re going to lend money to,” Naramore said.Both, however, remain positive about the customer.
“It’s obviously a buyer’s market and they know they’re getting a great deal and you’re encouraging them to shop around,” Naramore said, “Most dealerships are really competitive right now. We need to move inventory — its no secret.”
“We are taking action to control inventories and reduce expenses where possible,” Chandler said, “It’s a national economic crisis and actions of individual car dealers have little impact on the overall consumer confidence.”
Dekki Jones, assistant sales manager at Belk Ford Mercury Toyota Inc., said they are also increasing incentives.
“Last month was the first it had really affected us with a sales drop of 41 percent,” Jones said.
“What I think is, people sit at home and watch too much TV,” Jones said about consumers’ wringing their hands over the economy. “Forget about it. Just go out and work and live your life.”
Despite the current crisis, the company’s new and pre-owned sales representative Dennis Freeouf is optimistic.
“I agree with the philosopher Georg Wilhelm Friedrich Hegel — history is cyclic and so is the economy,” Freeouf said. “If you’ll go through a text book, you’ll see that though times are rough, there is a light on the other side.”
His main confidence remains in the product.
“Despite the current situation, from what we’re doing, we’ve remained in the top 20 in the state in sales,” Freeouf said. “We do not like turn over; customers do not like turnovers. Customers like a product bought from a company they like and that will follow through.”
But, according to The Detroit Free Press statistics remain low. Across the nation, Toyota sales dropped 32.2 percent, Chrysler sales fell 33 percent and Honda sales were down 28 percent in the past few months. With Ford, sales were down 33.8 percent, 22.5 percent at Lincoln, 43.2 percent, Chrysler sales at 33 percent, and Honda sales down 28 percent.
Chandler said he believes this is a problem the whole nation will have to contend with in order to make change.
“It’s such an enormous issue that I think everyone is frustrated whether you own a dealership, restaurant, small business or factory,” Chandler said. “The solution rests with the combined efforts of all Americans.”
Reports were circulated last week that poor market conditions had convinced Toyota officials to delay the opening of the company’s Blue Springs plant until 2011, but the company is dismissing these media reports, according to AutomotiveWorld.com Toyota officials are saying that for the moment at least, the company plans to continue with preparations to open the facility in 2010.
Published: November 17, 2008
THE OXFORD EAGLE