Auto Dealers and Buyers Showing Confidence

Low interest rates, manufacturer incentives and a desire for replacement vehicles are keeping the San Fernando Valley area car and truck dealers competitive in an improved sales environment. Another sign that dealers are confident the economy is rebounding and that people are ready to buy again: new dealerships are opening this summer or are planned to open early next year. The Valencia Auto Center in Santa Clarita will add Audi and MINI Cooper dealerships in early 2013. The Thousand Oaks Auto Mall welcomed a Rolls Royce and Bentley dealership to a temporary showroom, with the dealership moving to a permanent location by the end of the year. When the MINI and Audi stores open, the auto row in Santa Clarita will sell 25 different brands, making it one of the largest auto malls in the region, said Don Fleming, long-time president of the Santa Clarita Valley Auto Dealers Association. “We can make it a destination,” Fleming said. “When you have all the brands together, that is convenient for the customer and we like it because they like to cross shop.” Fleming, who operates Valencia Acura with wife Cheri, meets with the association’s members on a monthly basis and has a good sense for sales performance. The hot weather in early August kept potential buyers away, but otherwise the auto row was doing okay, Fleming said. “(Sales) are not great but they are holding their own,” he said. As the luxury division of Honda, Acura sales are showing improvement from a year ago. Last summer Fleming and other dealers had limited inventory because the March 2011 earthquake and tsunami in Japan affected production of both Honda and Toyota vehicles. Sales of both brands improved between 40 percent and 50 percent this summer from a year ago, estimated Chuck Dapoz, a long-time auto industry marketing professional based in Los Angeles. “Nissan was not hit as hard because they have more production in the U.S.,” Dapoz said. In June, 2,202 new Acuras were registered in California, a leap of 76 percent from 1,283 registrations in June 2011, according to figures compiled for the California New Car Dealers Association. Overall, the second quarter resulted in 432,814 new vehicle and light truck registrations in the state. That is a 27.4 percent increase from the 339,645 registrations from the same period a year ago, the association said. For the first six months of the year, new vehicle and light truck registrations totaled more than 827,000, for a 14.8 percent increase from 675,000 registrations in the first six months of 2011. Chrysler was the top-selling brand in California in the second quarter. Kia, Jeep, Volkswagen and Toyota/Scion rounded out the top five, according to the association. The Shaver Automotive Group has seen a 15 percent increase year-over-year at its Chrysler dealership at the Thousand Oaks Auto Mall, said owner Andrew Shaver. He attributed the automaker’s increased sales to an improvement in fuel efficiency in its vehicles, Shaver said. “That had been a weak point, and it is now a strength,” Shaver said. Volkswagen sales were up primarily due to the redesigned Passat, a mid-size sedan manufactured for the North American market in Tennessee, which helps keep the cost down, Dapoz said. “They have priced (the car) very aggressively, and they are doing very well,” Dapoz added. The new and improved models are encouraging buyers to visit area dealerships. With seven years as the average age of a vehicle, owners are ready to buy new, said Scott Stanley, general manager at Honda of Thousand Oaks and Acura of Thousand Oaks. Incentives ranging from cash back to interest rates between 0 percent and 1.9 percent help to drive sales, as well. “I cannot remember a better time to buy or lease,” Fleming said. At Honda of Thousand Oaks, three vehicles dominate between 70 percent and 75 percent of sales — the Accord, Civic and CR-V, a crossover sport utility vehicle, Stanley said. Affordable lease terms of $200 a month, excellent reliability and high resale value make Hondas a must-look among car shoppers, Stanley said. “They require little upfront and make for a solid choice versus some of the other vehicles,” he said. Download the 2012 VALLEY’S LARGEST AUTO DEALERS list (pdf)