How 2009 Treated the Region’s Automotive Industry

Unstable supply, unexpected demand, bailouts and

finance freezes-2009 has been a wild ride for local dealers.

We get the hard numbers and their report on how they fared.

Need Cars to Sell Cars

It's been one extreme to the other for car dealers. After months of sluggish new car sales, the federal Cash for Clunkers program created incredible demand, which in turn created an inventory problem. Cherry Capital and Traverse Motors Owner Otto Belovich said, "We were absolutely out of cars. At one point during Cash for Clunkers, if we had a VIN and a delivery date for a vehicle that was headed our way, we'd sell them, too. That whole program caught everybody so unprepared, we all just ran out. It was good-I'm not complaining-but the dealers and the manufacturers just were not ready for it.

Big Drop

2009's best seller, the Kia Optima, topped out with 114 sold a year ago; only 15 were sold in the same period this year, representing an 87-percent drop. Williams Kia Owner William Chichester says it was due to limited supply, noting "that was a pure supply and demand issue. We might not have sold 114 [this year], but I think we would have done much better if we had more of a supply of Optimas."

The Used Scene

Although the TCBN did not research used car sales for this report, local dealers did report that used cars sold very well during the third quarter. Mike Marsh of Bill Marsh Auto, which is the local leader in used car sales, noted, "the used car market is solid volume and has been consistently so all year … as it typically is."

Doing Something Right

With his Fox Grand Traverse dealership the only local dealer to post an increase in new car sales in the third quarter, John Cueter points to a few reasons: "We're managing our customer traffic better, making sure there's followup with our customers and trying to earn their business. We have a really good brand here, we're doing a better job of training our people, and it's truly been a team effort."

Clunker Kings

Below are the best selling models for each local dealer group under this past summer's Cash for Clunkers program:

Williams: Honda Civic

Bill Marsh: Hyundai Sonata

Fox Grand Traverse: Ford Focus

Cherry Capital/Traverse Motors: Toyota Corolla

Kia Country No More?

Last year's top ten sellers included three Kia models, including the top seller. This year, Kias only posted two top ten sellers, the highest coming in at number seven. Have TC car buyers moved beyond Kia? "It's absolutely still Kia Country," insists Chichester. "It's just that the credit crunch has really hit this secondary finance market so profoundly, it's affecting our sales of these vehicles."

Pickups are Back!?

Surprised that TC's best selling vehicle is a full-sized pickup, after three years of a tiny, gas-sipping Kia in that top spot? We were too. Williams Chevy Owner Chichester says the pickup buyers of today are similar to those in decades past. "It's not so much the weekend warrior or soccer mom buying these pickups now. We're seeing much more of these being purchased as replacements for laborers and tradesmen who use the vehicle for work purposes."

What Next?

What does 2010 hold for auto dealers and sales? Chichester is optimistic: "We've seen the new car market stabilize and we'll see some steady growth." Says Marsh, "The industry analysts are predicting a slow, steady rebound in 2010, and

I agree with that analysis."BN