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Automotive Comeback

Nationwide sales rise for first time since recession

January 16, 2011
By MIKE ZUMMO, The Leader-Herald

Auto sales rose in the United States last year for the first time since the recession, and several local auto dealerships said they had big years in 2010 and have entered 2011 with optimism for the first time in several years.

Jeff Brown, co-owner of Brown's Ford, which has locations in Johnstown and Amsterdam, and George Kline, president of Main Chrysler/Dodge/Jeep in Johnstown described 2010 as a big year.

Main was created this year out of a merger of Johnstown Dodge and H&P Motors in Gloversville.

Article Photos

Shannon Kline, left, an employee of Main Chrysler-Dodge-Jeep of Johnstown, and her father, President George Kline, work on a customer’s deal at the dealership in Johnstown on Wednesday.

The Leader-Herald/Bill Trojan

"We've now been together physically for a few months and things are starting to jell," Kline said. "People that have come from both places are really beginning to work together very well."

Kline also called 2011 a "very exciting year for the Chrysler Corporation" as 112 new models have been introduced and the public is starting to turn back toward American cars.

"I would say two years ago, we had an attitude that if it was made in America, it wasn't a good product," he said. "I think in the last two years that has turned the corner. I think people have realized American products are excellent. I think we realized we've got to support our local businesses and our own companies."

Brown called 2008 and 2009 stressful, but said during the middle of 2009, things started to improve. However, when people started to buy cars, they went for vehicles with amenities.

"We're selling some of the more expensive models, which is something that surprised us," he said. "People are buying vehicles with DVD players, moonroofs and things like that."

For the year, car and truck sales came in at 11.6 million, up 11 percent from last year, automakers reported Jan. 4. For December alone, sales were 1.14 million, also up 11 percent from a year earlier.

Those numbers, however, are still far from what they were just a few years ago, but the downsized auto industry can post profits even if they sell millions fewer cars and trucks.

For now, executives are optimistic about this year. General Motors, Ford and Toyota all predict sales will come in at 12.5 million to 13 million for 2011. It will take years, analysts expect, to get back to the peak sales of the middle of last decade - more like 17 million.

"The economic downturn has lasted quite a while," says Jessica Caldwell, director of pricing and analysis for consumer website Edmunds.com. "It's going to be slow and gradual rather than a fast bounceback."

While the figures have some in the industry talking about a return to the glory days, it's a fragile idea. Rising gas prices or more economic trouble could still shake the confidence of American car buyers.

Brown has seen the reaction to high gas prices in the dealership's sales register. Normally, people by trucks to deal with the winter in December. That hasn't been the case this year.

"We sold a lot more Focuses during December this year because of the price of gas being what it is," he said. "That's still a concern for a lot of people."

Over the past two years, many Americans, even those who had enough money to buy a car during the recession, had been wary to commit to monthly car payments, so they put off making such a large purchase. Many opted to repair or make do with what they had.

"Our service department was fine because people were holding on to older cars and making more repairs," Brown said. "Now they're starting to put that money back into a new vehicle."

U.S. automakers are relieved to have the past two years behind them. When the financial crisis hit in the fall of 2008, car sales plummeted. GM and Chrysler were on the brink of death, saved by a $60 billion government bailout and speedy bankruptcies that helped both companies close plants and eliminate debt. Ford didn't declare bankruptcy or take a bailout, but it closed plants, laid off employees, and worked to lower its overall cost structure.

However, dealers are looking forward to 2011.

"I'm very optimistic," Kline said. "I think we've been through a very tough road the past two years [and are coming out]. But, then again, people in the car business are usually weirdly optimistic."

Information from The Associated Press was used in this report.

 
 

 

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