By Raymund Lee Flandez
ANNAPOLIS – Stuart Brooks, a Baltimore auto dealer, has had an incredible year, riding the boom in car sales that have made Altimas, Cavaliers and Impalas zoom out of showroom floors.
“We just kept flying and never stopped,” said Brooks, president of Bob Bell Chevrolet Nissan.
Through the end of August, Bob Bell’s auto sales jumped 10 percent ahead of all sales last year, he said.
Brook’s only problem then was running out of inventory.
But now Brooks and other state dealers see evidence that a national car sales slowdown is hitting here.
After automobile manufacturers put out a slew of incentives last year after the Sept. 11 terrorist attacks and subsequent economic fallout, Maryland car and truck dealers have hit a speed bump. Most dealers said they saw a decline in new auto sales in September, the first since 0-percent interest boosted auto buying late last year.
For the last month and a half, sales have been off, said Peter Kitzmiller, president of the Maryland New Car and Truck Dealers Association, which represents about 320 auto dealers in Maryland. From his talks with members, it seems automakers’ bargain deals have fizzled out.
“It’s been out there for a year now and has probably gotten a lot of people,” Kitzmiller said. “Now it’s reached the point of diminishing returns.”
The top American automakers, such as General Motors and Ford, reported sales dropped nearly 33 percent last month compared with October 2001.
State dealers have named other reasons as well: The sluggish economy is causing low consumer confidence; the area’s sniper shootings made people fearful and unwilling to step onto car lots; campaign television ads took away time for car sales pitches.
Some are terming such a slide as part of a cyclical business.
But John Miller of Ellicott City’s Miller Brothers Chevrolet Olds Cadillac doesn’t buy it.
“I don’t think there’s been a big slowdown as perception might have it,” he said. Besides comparing October 2002 with the record October 2001 is a bit unfair, he said.
For Maryland’s auto dealers, October 2001 was an aberration – it was the best October that they had ever seen. More than 39,300 cars were sold, up 17 percent from October 2000’s 33,599, reported the Maryland Motor Vehicle Administration. State data from this year’s October is still being compiled.
A reintroduction of 0-percent interest offers in July and August is expected to make 2002 the fourth-best year in history for new car sales, said Paul Taylor, chief economist of the National Automobile Dealers Association in McLean, Va.
Even amid a nationwide slump, consumer spending on vehicles, along with home sales, remains one of the positive highlights in Maryland’s economy.
The state’s auto market has proven to be stronger than the U.S. average through the first half of the year, according to the Department of Business and Economic Development. New state auto registrations, which rose during six of the first eight months, were up 4 percent in August over last year’s figures. Nationally, new auto registrations remained unchanged at 1.4 million vehicles.
Year-to-date figures also show Maryland is on track to top last year’s total car sales. With September car sales released Thursday, the nine-month total is up 3.2 percent than the same period last year.
And contrary to dealer anecdotes about car sales declining this quarter, September saw about 800 more cars sold than August, the state MVA reports.
The state dealers’ association said last year’s record-setting fourth quarter will be impossible to match with the slow economy and the possibility of a “double-dip recession.” The group said new vehicle sales in the state will likely decline next year by about 5 percent from this year.
But Kitzmiller said auto manufacturers aren’t pulling back offers; they’re on full throttle, especially with new bargain programs available for buyers until January.
At a time when end-of-the-model-year closeouts are taking place, automobile manufacturers are taking a bolder step with its trifecta deal: no interest, no money down, no payments for 90 days.
Plus, with the Federal Reserve slashing rates a half-point Wednesday to 1.25 percent, automakers should be able to continue offering these deals as they try to make up revenue by sheer volume of sales, economists said.
“Manufacturers are probably doing a good job as they can to get car sales going,” said Vincent Trasatti, president of East West Lincoln Mercury of Landover Hills and chairman of the state dealer’s group. “I can’t remember having seen incentives as strong as they are right now. And I’ve been in business for 34 years.”