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Confident Public Helps Get New Auto Sales Back on Track

The numbers bode well for auto sales in 2013.

Lance Roberts looks at what is on the road and sees pent-up demand for new vehicles.

Roberts, who is part of the staff at the New Car Dealers Association of San Diego County, said he’s seen one estimate that the average age of a car on the road is 10.8 years.

“It’s almost double what it used to be,” he said.

Another hopeful number: vehicle registrations are up 27 percent, year over year. The car dealers association keeps track of new auto and light truck registrations. Some 111,400 vehicles were registered in San Diego County during the first 11 months of 2012, the organization said, up from 87,600 for the same period of 2011.

“There is a huge surge in confidence in the auto-buying public,” said Kevin Leap, another member of the association staff and director of the San Diego International Auto Show. The association puts on the four-day show at this time every year at the San Diego Convention Center.

Manufacturers are responding to a more confident public, Leap said, with new models, advanced technology, advanced safety features and incentives to buy.

One more hopeful number: The latest auto show featured “ride and drive” opportunities with 13 makers, up from eight the previous year, Leap said.

Manufacturers “really feel the public’s ready to buy,” Leap said.

Driving Forces

Indeed, they were making several appeals.

On one part of the show floor, Ford Motor Co. was touting its revived Lincoln brand with a combination of new media (PDF brochures, smartphone apps) and a display that had a 1960s-era, “Mad Men” vibe. A Lincoln MKZ four-door sedan, which starts at $36,000, was turning slowly atop a rotating stand. Among its many options is a hybrid version which boasts 45 mpg.

Several hundred yards away, Joe Allis was promoting another kind of high-end automobile.

Allis is the owner and general manager of Porsche of San Diego, a business he recently bought.

On display around him were the latest versions of the classic, rear-engine Porsche 911. An entry-level Carrera sells in the $100,000 range. More advanced versions can reach $200,000 (and 190 mph). Also on view was Porsche’s version of the sport utility vehicle, the Cayenne. The 500 horsepower turbo model is capable of 172 mph.

There are options aplenty on the vehicles. Porsches are like snowflakes in that none of the cars are the same, Allis said.

Allis, who bought the San Diego dealership in March, has recent experience selling high-end cars in the greater New York City area. He says people in each market take different approaches to car-buying. One example: While San Diegans are eager to drive a car off the lot, denizens of New York and New Jersey are more likely to walk in, plan an order and then pick up their vehicle later.

‘Hospitality Services Business’

The owner said he does not approach his business as a retail venture. “I believe we are in the hospitality services business,” said Allis.

The businessman said his investment in the local Porsche dealer has proven its worth.

The auto show is supposed to be a low-pressure environment, Leap said. There’s no selling allowed. But there is marketing aplenty. “People make buying decisions here all the time,” said Leap.

Among those who paid money to view the auto show displays were Lee De Tro and Marie Roecker of Clairemont.

“We come down every year,” De Tro said.

“We’re Dodge-Chrysler people,” Roecker said.

The two said they weren’t in the market for a vehicle — at least right now — but they acknowledged that auto shows influence their decisions.

Roecker said one show helped her make up her mind on the 2006 Chrysler four-door sedan that she eventually bought. It now has 43,000 miles on it.

De Tro drives a 2002 Dodge Dakota pickup truck with 172,000 miles on the odometer.

The auto show is a valuable research trip for the couple. De Tro estimated that 50 percent of the salespeople he meets at auto dealerships aren’t very knowledgeable. “It’s funny how little the sales staff knows about the vehicles,” he said.

Auto dealers have not yet seen sales reach pre-recession levels, said the association’s Roberts. Still, he said sales are closer to pre-recession levels than the levels they held when the recession was at its worst.

New Car Dealers Association data shows that Toyota had slightly more than 20 percent of the San Diego auto market in 2012. In the first 11 months of the year, drivers registered 22,960 Toyotas and Scions, up from 16,700 in the first 11 months of 2011.

Other big sellers were Honda, with 12,400 registered, and Ford, with 12,200 registered in the first 11 months of 2012. Both brands enjoyed roughly 20 percent year-over-year growth.

Fiat — which recently returned to the American market with its 500 model — was the brand that enjoyed the biggest percentage growth in 2012. Nine hundred Fiats were registered in San Diego County during the first 11 months of 2012, up 419 percent from the same period in 2011. The base model of the Fiat 500 has a list price of $16,700.

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