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Strong car sales raise hope for 2013

Cars
Jan. 05, 2013 @ 11:00 PM

A variety of factors -- an improving economy, better supplies, low interest rates, pent-up demand -- fueled improved sales for most Tri-State automobile dealers last year and have them expecting another strong year in 2013.

For C&O Motors in St. Albans, it was the third best year the dealership has had in more than 60 years.

"It was a good year," said Gene Walker, general manager/executive manager of C&O, a top used car dealership in the nation. "We sold 322 cars the week after Christmas, and that's the best after-Christmas sale we've ever had. We're looking for good things to happen in '13, but '12 was a good year. Automotive News is forecasting a good year, but we don't try to pay too much attention. If they tell you it's bad, you can't hide under a bushel."

Sales of new cars and trucks in the United States in 2012 totaled about 14.5 million, or 13 percent better than in 2011 and the best performance in five years. The Polk auto research firm based in Southfield, Mich., predicts even stronger U.S. sales for 2013, forecasting 15.3 million. One factor in its prediction is that it expects 43 new models to be introduced, and new models usually boost sales.

"The economy coming around is what's really helping out nationally. We're continuing to see things moving in the right direction," said Joel Goldy of the new Goldy Auto in Huntington and a longtime employee of the Moses Automotive Group. "Our sales stayed pretty strong through the downturn. We're fortunate to be in a good car market. I think West Virginia sales stayed strong the entire time."

Bill Cole Automall, which has dealerships in Ashland, Ky., and Bluefield, W.Va., had a good year but not a record year.

"I'll take this year again next year," he said, adding that 2012 wasn't stellar mostly because southern West Virginia had a tough year due to the struggling coal industry.

"Truly, it's cost a fair amount of jobs ... and it leads to the general uncertainty that people have," he said. But he's looking for a good 2013 as well, he said.

Besides a generally improving economy in many parts of the country, other factors at play in the auto industry rebound were low interest rates, more relaxed borrowing standards, and the age of cars already on the road. The average age of a car topped 11 years nationally, a record that gave people motivation to buy a new, or at least newer, car.

And for some dealers, just having decent inventories was a relief after an earthquake and tsunami crippled many auto factories in Japan two years ago, thus making it tough for dealers of those cars to have models on hand for much of 2011. Toyota and Honda were among the carmakers affected.

Barbara Moses Atkins said Moses Honda Volkswagen saw a 17 percent increase on sales of new Hondas this year.

"Last year, we had a challenge because Honda went through that tsunami, and that really limited our inventory, and that should be taken into consideration," she said. "I can attribute our improvements this year to two factors -- better inventory and our new location has definitely helped."

Her dealership expanded to a new location off the 29th Street exit of Interstate 64 this year, and it's been a good move, she said.

"Overall, it was a very good year," Atkins said. "My used car business grew quite a bit. Before, I was at a location where I couldn't have as many used cars on site. We can store more and have a lot better displays, and our service department was up 17 percent because we could handle more capacity in the building.

"Now that the election is over and this cliff hanger is over maybe people will be more in the market to purchase more products, not just automobiles. I think consumer confidence is improving."

Consumers have a wonderful opportunity with today's low interest rates, Atkins said.

"Even though the consumer has gotten used to that, it's still unbelievable to have zero interest on 72-month loans," she said. "It's hard to tell how long loans will stay down."

Chrysler, the smallest of the Detroit carmakers, had the best year among U.S. companies. Its sales jumped 21 percent. December sales rose 10 percent. Demand was led by the Jeep Grand Cherokee SUV, Ram pickup and Chrysler 300 luxury car.

That's all good news for Goldy of the new Goldy Auto at KineticPark, which started selling cars at the end of last month. It now has an inventory of about 50 cars on the lot, and is expecting about 30 more soon, Goldy said.

"Chrysler has had a great product resurgence," he said. "They've really redone the majority of their lineup, and they've done a great job of turning around. It's an exciting time to be part of Chrysler."

Among European carmakers, Volkswagen dominated, with annual sales up 35 percent.

But full-year sales at Ford and General Motors lagged. GM's rose only 3.7 percent for the year, while Ford edged up 5 percent. For December, GM sales rose 5 percent, while Ford was up 2 percent.

December featured year-end deals on big pickup trucks; GM offered discounts of up to $9,000 to help clear growing inventory. The move worked. GM cut its full-size pickup supply from almost 246,000 at the end of November to just under 222,000 as the year came to a close.

Overall, though, analysts said the industry eased up on promotions such as rebates and low-interest financing. Car and truck buyers paid an average of $31,228 per vehicle last month, up 1.8 percent from December 2011.

The Polk research firm predicts a rebound in sales of large pickups and midsize cars. All eight of the top manufacturers are strong and introducing new vehicles, and that should bring competition and lower prices in those segments, according to Tom Libby, lead North American analyst for Polk.

But the firm's optimistic forecasts hinge on Washington reaching an agreement on government debt limits and spending cuts.

The Associated Press and The Herald-Dispatch reporter Jean Tarbett Hardiman contributed to this report.

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