Auto dealers replenish after Cash for Clunkers

With fuel-efficient automobiles rolling off the lots in record numbers during July and August, Rogue Valley dealers are trying to fan the flames of momentum.

"I think we're all trying to rebuild inventories anywhere you look or go," said Randy Nidalmia, sales manager at Southern Oregon Subaru Volvo Mitsubishi. "We had two record-breaking months in July and August. July was our best-ever month and we broke that in August."

Admittedly the Subaru brand had something to do with that, Nidalmia said. "At the beginning of August, it was the only manufacturer that was up (in sales) year-over-year."

Several of Subaru's new models have been showing up on lots for the past month. The Japanese car maker's success was such that Nidalmia said the company held off pushing its national advertising campaign until dealers could stock up.

"Throughout the recession everyone is carrying a shorter inventory than they normally would," he said. "We try to keep our levels at 60 to 90 days; beyond that the costs is just too high. When Cash for Clunkers came along, what we would have sold in four months went in six weeks — based on what we've seen during the recession."

There's little doubt auto dealers are holding their breath when it comes to the broader economy, but local retailers are still seeing shoppers.

"With Cash for Clunkers, buyers were coming in to absolutely, 100 percent purchase a car," said Todd Worcester, General Manager at Dollar GMC. "It created a buzz, even people who didn't necessarily have the right vehicle were looking. A national program like that with only a certain amount of money creates a sense of urgency. I don't think that sense of urgency is as influential under normal times and normal shopping perimeters."

Even though Dollar's inventory is "a little depleted" Worcester said he anticipates factory incentives and good interest rates will keep things going. "I think we're going to have a decent fall," he said.

Lithia Toyota cashed in a bit during the clunker program and sales manager Steve Davis said there are plenty of cars en route to replenish the inventory.

"Right now, there are 83 cars on the ground or soon to be here and beyond that we expect another 100 in the next 45 days," Davis said.

However, the foot traffic through the dealership has declined since the government program ended.

"It's like someone pulled the plug," Davis said. "Our floor traffic has dropped by at least 50 percent."

The difference he believes, is that the people showing up now have different expectations.

"Cash for Clunkers brought people into the market place that probably had no intentions of buying a car now or in the future," Davis said. "We literally got people out of the house and on the lots that were going to drive their car until it wouldn't drive any more. The government's intention was to get more fuel efficient cars on the road, but it turned into a stimulus package."

According to some industry analysts Chrysler and General Motors may have a hard time restocking dealerships after closing factories around the country.

So as the 2010 models take over the lots, selection may depend on the auto maker.

"During the best of times we were selling 35 to 40 new Subarus a month," Nidalmia said. "The last year wasn't the best of times, so it was more like 25 to 30 this past."

During the clunker rush, he said the company had to turn away some customers because it didn't have the inventory.

"We've taken more orders than ever before," he said. "We've sold three or four cars that have yet to arrive."

Heading into the fall and winter, Nidalmia shares a common sentiment with other auto sellers.

"We hope to see business as usual," he said. "With employment turning around and signs of the recession turning around, we're hopeful. The auto and home industries will lead the recovery. Whether Cash for Clunkers was just a program or a sign of better times, we don't know. The reality is that it could hardly be worse than 2008."

Reach reporter Greg Stiles at 776-4463 or e-mail

Share This Story