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LI dealers hope 2016 auto models will accelerate flat car sales

Dealers, such as Atlantic Toyota on Sunrise Highway

Dealers, such as Atlantic Toyota on Sunrise Highway in Amityville, said they hope 2016 models help lift the industry. Credit: Joseph D. Sullivan

As another model year begins, Long Island's new vehicle market is on cruise control. Sales are running at a strong and steady pace but no longer accelerating.

And some economists are watching warily as economic slowdowns in Europe, China and Japan roil U.S. stock markets and, potentially, take a toll on consumer wealth and confidence in model year 2016, which began Thursday.

The 2016 models, and a few for 2017 about which information has been released, run the gamut from economy vehicles like the redesigned Chevrolet Spark and Honda Civic to a convertible version of the Mercedes-Benz S-Class. Eight new or redesigned SUVs include the first such offerings from Bentley and Jaguar -- the Bentayga and F-Pace, respectively.

Gasoline prices are a dollar lower than a year ago, making gas mileage a less urgent concern for consumers than last year. Still, carmakers must meet federally mandated average fuel economy standards. So most of the new SUVs are compact to midsize and based on lighter-weight car chassis, to deliver better fuel economy.

Moreover, seven new gasoline-electric hybrids are due at dealerships in coming months, including a redesigned Toyota Prius and a version of the just redesigned Chevrolet Malibu. General Motors says the hybrid Malibu, going on sale in the spring, will attain an estimated average of 47 miles per gallon in city and highway driving.

Three plug-in type hybrids, whose batteries can be recharged from electric outlets, are due -- from Mercedes, Audi and BMW.

At the same time, power still sells in showrooms and, while the revived Acura NSX sports car going on sale in the spring also is a hybrid, its power plant delivers 550 hp.

The new models have more safety features than ever, including forward collision warning and automatic braking -- features that are migrating from luxury models into less expensive cars.

The redesigned Lexus RX 350/450h SUV has a system intended to prevent pedal misapplication leading to unintended acceleration by reducing engine power if brakes are applied simultaneously with the accelerator pedal.

The Cadillac CT6 sedan will have a night vision system to spot pedestrians or animals in the road from their heat signatures.

Jaguar's F-Pace can recognize a drowsy driver from the usage of the brake and accelerator pedals, directional signals and other clues and display a visual and audible warning to prompt the driver to take a break. The F-Pace also, via cameras, can recognize speed limit signs and warn the driver who fails to adhere to them. The feature can be turned off, however.

General Motors says the new Malibu, whose nonhybrid versions hit showrooms in December, will be available with a system to record teenagers' driving statistics, such as maximum speed and any warning alerts, for later review by parents.

And Nissan's 2016 Altima is available with a feature for those who can't bear to miss or reply to a text: "Hands-Free Text Messaging Assistant," which reads an incoming text out loud to the driver, who can then respond via voice or press steering wheel switches with preset answers such as "driving, can't text," "on my way," "running late," "OK" or a custom message.

An eye on the fast lane

Island dealers hope the new features will excite interest and take car sales off their current plateau. New vehicle sales on Long Island had been growing each year since the last recession ended in 2009, based on new registration figures from auto data provider IHS Inc.'s data gathering unit R.L. Polk & Co. Long Island new vehicle registrations rose by 4 percent last year over 2013, to 210,468 cars and trucks. The 2014 figure represented a 34 percent increase over 2009, when only about 157,000 new vehicles were registered in Nassau and Suffolk.

Helping maintain the pace, besides cheaper gas, is the popularity of leasing, which accounts for almost six in 10 vehicle sales on Long Island and brings consumers back to showrooms every three years.

But the growth halted this year, at least through July, with 127,297 new vehicles registered, a fraction of 1 percent more than the same period a year earlier.

Economists and some dealers attribute that to satisfaction of pent-up demand during the recession, and to stagnant wages, the substitution of good jobs lost during the recession with lower-paying ones, and sluggish real estate and stock markets earlier in the year.

"We have fulfilled the postponed demand from the 2008 credit crisis and the market is starting to crest now," said dealer Mark Calisi, who sells Chevrolets, Kias, Volvos and Mazdas at stores in Riverhead. "I'm expecting a little bit of a jump in January and February because of new models, then I see a leveling off for the rest of calender year 2016."

More upbeat is co-owner Michael Brown of the 22-store Atlantic Auto Group, the Island's largest dealership chain handling a variety of U.S. and foreign makes. He expects a surge of customers in coming months as cars leased for 36 months in the fall of 2012 to replace those destroyed by superstorm Sandy come back to dealers.

"I think you should see an uptick in business in November, December, January and February," he said. "You have a bucket of people ready to come back into the market and it's a big bucket."

Not driven to spending

Still, consumer sentiment has declined in the New York City region, according to a Siena College Research Institute poll, which showed a 2.1 percent drop from March 15 to June 15.

"People are not feeling as wealthy and, in that situation, they tend to hold off on spending," said chief economist John Rizzo of the Long Island Association, a business group.

The Island's performance in the first seven months of this year trails that of the 12-county region covered by the dealer association, which includes Long Island, the city's five boroughs and the northern New York suburbs. Regionally, registrations of new vehicles rose by 4 percent this year through July. Nationally, car sales, which approximate new registrations, rose by 4.5 percent from January through July over a year earlier, according to the trade paper Automotive News.

"Everybody is making deals right now because dealers have an abundance of cars," said owner Gary Schimmerling of Babylon Honda. "We're doing whatever we can to move product."

Through July, Honda was the most popular brand on Long Island, according to the dealer association figures.

More belts tightened

The gains until this year on Long Island mirrored improvements in the economy since 2009, especially in jobs -- a picture that continues to brighten.

But Long Island's low unemployment rate -- 4.5 percent in August -- doesn't count people who have given up looking for work. And the rising employment numbers don't reflect people who are working part time now instead of full time or those who lost good-paying jobs during the recession and are now working for lower compensation.

Martin Melkonian, an adjunct professor of economics at Hofstra University, thinks the aging of Long Island's population might also be affecting car sales. Older people tend to drive less and so replace cars less often. And it's likely that many are concerned about recent stock market volatility and its impact on their 401ks and other investments. "Older folks are feeling like 'Let's tighten our belts a little. Let's see how this volatility plays out,' " Melkonian said.

Co-owner Lee Certilman of Nardy Honda in St. James points out also that many of the youngest consumers aren't yet in position to buy new cars. "It's expensive to exist on Long Island, especially if you're younger."

The fuel factor

Cheaper gasoline has led to a resurgence in sales of large cars and SUVs, which generally are more profitable for dealers. They're growing as percentages of the total at the expense of the small cars that were so popular when gasoline was more than $4 a gallon.

Through August, new registrations of light trucks, including SUVs, vans and pickups, rose by 11 percent from a year earlier in the region covered by the dealer group, while those of passenger cars fell by almost 4 percent, according to the dealer association.

Gas prices have fallen by more than $1 a gallon over the past 13 months, saving the motorist who drives 15,000 miles a year in a car that averages 20 miles per gallon about $750 over 12 months. Regular averaged $2.41 on Long Island Friday morning, AAA said.

Low gasoline prices certainly make it easier for consumers to afford driving powerful cars. The new Chevrolet Camaro SS version for 2016 is said to be the most powerful ever, with a 455 hp. V-8 and the ability to sprint from 0 to 60 mph in 4.0 seconds and cover a quarter-mile in 12.3 seconds.

While no one is expecting the 2016 model year or calender year to deliver the Camaro's kind of sales horsepower, dealers expect a year at least as strong and maybe a little stronger than this year.

"I think it's going to be a good year, as long as interest rates stay at decent levels and there are some good [manufacturer] deals out there," said Schimmerling of Babylon Honda.

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