Car dealers optimistic about more growth

By TOM INCANTALUPOtom.incantalupo@newsday.comOctober 9, 2011

At the traditional start of a new model year, new car sales are a bright spot in an iffy economy, helping to raise hopes that a second recession will be avoided.

Despite some clouds on the economic horizon, sales for all of this year are almost sure to finish above last year's dismal levels. And many signs suggest further growth next year, although no one is publicly forecasting a return any time soon to pre-recession national sales levels pushing 17 million new cars and light trucks.

"Given that there are still pretty significant limiting factors as far as the economy, we look at 2012 as improved over 2011 but perhaps not significantly improved," said Alec Gutierrez, a market analyst for the Kelley Blue Book Co. Inc., an auto information provider.

Forecasters retained by the Greater New York Automobile Dealers Association expect metropolitan area sales this year to total 421,000, up 9.2 percent from last year. The region includes Long Island, New York's five boroughs, and Westchester and Rockland counties.

Kelley expects sales nationally to total 12.5 million this year and just over 13 million next year. During the recession sales fell as low as 10.5 million, in 2009.

Reasons for optimism include pent-up demand. Some local dealers say the increasingly ratty cars being given as trade-ins suggest that buyers who postponed purchases during the recession are running out of time. "Getting a trade with 100,000 miles or more now is the norm," said Mark Calisi, who sells Chevrolets, Kias, Mazdas and Volvos at his Eagle Auto Mall in Riverhead.

The average car and light truck on the road last year was almost 11 years old, compared with nine years for cars and seven for trucks in 2007, according to the National Automotive Dealers Association.

Another reason is improving supplies of Toyotas and Hondas, with the restoration of production interrupted by March's earthquake and tsunami.

At Huntington Toyota/ Scion general manager Lenny Cafarelli said he has 250 cars allocated to him this month -- five times the number in June and July. "I'm going to say that by the first of the year, we'll be back to normal in ground stock," he said.

With increased supplies of Japanese models have come increased incentives on them -- rebates and the like, said Gutierrez. "Expect to see GM and Ford and Chrysler try to answer the Japanese in some way with additional incentives," he said. Incentives usually stimulate sales.

More positives are low interest rates on loans and improved availability of credit.

Mark Schienberg, president of the local dealer group, said significant new products also should help, including two mainstays for their manufacturers: the Toyota Camry and Honda CR-V, the former now on sale, the latter due by year's end.

A redesigned Chevrolet Malibu is due early next year and a redone Nissan Altima later in the year, along with a new compact Dodge sedan. The 2012 model year traditionally begins Oct. 1, though most new models introduced since last Jan. 1 have been designated 2012s, while most to come after Jan. 1, 2012, will be 2013s.

The clouds on the horizon, experts say, include the economic uncertainty that's hurting consumer confidence. A Siena College poll released last Monday found confidence on Long Island at its lowest this summer since early 2009, during the recession, with pessimistic people outnumbering optimistic ones.

For that reason, dealer Calisi is less optimistic as some others in his industry. "The basic fundamentals for people to buy cars and trucks are not there," he said. "If the economy grows, sales will grow."

But Schienberg said, "The auto industry continues to defy what's going on out there in other economic sectors."

Some new or redesigned models expected in the next 15 months.

(in alphabetical order by brand)

Brand / Vehicle / When expected at dealerships

Acura / Redesigned RDX and MDX / Next year

BMW / ActiveE, electric 1 Series/ Near end of this year

BMW / Redesigned 3-Series sedan / First quarter 2012

Buick Verano/ small luxury sedan / By end of this year

Cadillac/ ATS compact sedan / Summer

Cadillac/ XTS large sedan / Spring

Chevrolet/ Redesigned Malibu/ First quarter 2012

Dodge/ redesigned Viper/ 2012