Dealer Association Forecasts Slide in New Sales

Registrations for new vehicles in California are expected to decline next year, according to a report released Thursday by the California Motor Car Dealers Association. The association does not expect a rebound in the state’s vehicle registrations until 2008, the report stated. For the third quarter, registrations of cars and light trucks decline 7.6 percent when compared with the same quarter in 2005. For the full year, the association forecasts 2.1 million registrations, down by 2.9 percent from 2005. The forecast for 2007 is 2 million registrations. Factors contributing to the lower sales figures are a slowing economy, higher interest rates, and high consumer debt coupled with a negative savings rate, said Jeff Foltz, an economic consultant for the association, during a conference call with reporters. The slow sales does give an indication into the consumer mindset, Foltz said, but there still remains the factor of consumer want and need for new cars. “Across the board there are products leading people to new auto showrooms,” Foltz said. For the first three months of the year, Japanese car makers increased their market share by 4.3 percent led by Toyota and Honda. The industry still remains competitive and every other manufacturer is targeting Toyota and coming out with good product, Foltz said. “I would say this is the most competitive and aggressive I’ve seen in the car business in the 54 years I have been in it,” said association Chairman Bert Boeckmann. Boeckmann is also president of Galpin Motors, one of the largest Ford dealers by volume in the world. Despite the problems faced by the Big Three U.S. automakers, Ford remains the top seller in trucks with its F-10 pickup and in sport utility vehicles, Boeckmann said. Where the domestic automakers have fallen short is with smaller cars because they often only develop one small car at a time while foreign companies often develop multiple small cars, Boeckmann said. “They needed to have diversified product and they are doing that, such as with Ford and the Fusion which is an excellent product,” Boeckmann said. The association’s study showed in increase in market share by sub-compact and entry cars for the first nine months of 2006. Full- and mid-size SUVs and full-size pickup truck market share declined.