Car sales improving

Car sales improving

January 23rd, 2011 by Mike Pare in Businesstopstory

Car salesman Greg Norris, left, explains incentives offered to Noelle Radcliffe if she purchases this Nissan Juke on Friday at Mountain View Nissan. Auto analysts say sales are starting to rise.

Car salesman Greg Norris, left, explains incentives offered... auto analyst Jesse Toprak cited a trend over the last few months that's warming car dealers' hearts and helping their bottom lines.

More people are walking into dealerships because they want to rather than need to, Toprak said.

"That's significant for those buyers to come back," he said. "Consumers are now more comfortable with making big-ticket purchasing decisions."

Hamilton County new vehicle registrations soared nearly 20 percent last year over 2009 as local sales joined and exceeded the industry surge nationally.

Countrywide, about 11.6 million vehicles were sold last year, up from 10.5 million in recession-stricken 2009, or 10.5 percent higher, Toprak said.

Don Thomas, general manager and dealer principal at Mountain View Nissan in Chattanooga, said his store recorded a 21 percent increase in vehicle sales last year, and he's eyeing similar results in 2011.

"Nissan is looking for the same kind of increase," he said. "I'm looking for the same thing."

Dwight Morgan, general manager of Integrity Automotive Group in Chattanooga, said sales there were about 37 percent higher than in 2009.

"The outlook is that it would be extremely positive - even over 2010," he said.



Hamilton County registrations of new cars and trucks:

• 2010: 9,512

• 2009: 7,939

• 2008: 13,236

• 2007: 16,215

• 2006: 14,202

• 2005: 16,951

• 2004: 17,685

• 2003: 15,944

• 2002: 15,727

• 2001: 14,846

Source: Hamilton County Clerk's Office

Toprak said he's estimating new vehicle sales in the United States will rise to about 12.7 million units this year.

While that's still off from the high-sale year last decade when 17 million units were sold nationally, the trajectory of growth is expected to continue, he said.

"It could be characterized as a healthy rate of growth," Toprak said.

He said there's not a lot of artificial influence on car buying now as well. The analyst noted there's no government-fueled "cash for clunkers" stimulus, and auto company incentive spending isn't excessive.

Toprak said there's pent-up demand among car buyers who may have postponed making a purchase.

Thomas said buyers are coming out more and lenders are loosening up in terms of car loans.

"That was the big problem," he said.

Morgan said the auto sales recovery is "definitely headed north."

He mentioned that domestic carmakers including General Motors also are experiencing improved sales.

"People feel good about what they're buying and want to support the American brands," Morgan said, adding that "the money does stay in the country and does not go somewhere else."

While many potential buyers are feeling better about a new vehicles, others said they're on the sidelines for now.

Yere Henderson, who is from Chattanooga but now lives in Tallahassee, Fla., said he's not looking for a new car with his being paid off.

"I'm satisfied with the current car," he said.

But, Amy Ware, of Chattanooga, said she bought a vehicle about six months ago.

"I just got one," she said.

Morgan said the uptick on gasoline prices hasn't affected the buying market so far.

Toprak said if fuel prices continue up, the more gas-efficient vehicles will sell better, mentioning both compact cars and smaller sport utility vehicles.

Volkswagen's new Chattanooga-made Passat will offer a clean diesel engine that gets up to 43 miles per gallon, according to the company. Toprak said VW needs to continue educating consumers about diesels.

He said there's a disconnect between what many Americans think of diesel engines and what's true about the new power plants.

"Many still think of grandpa's old bad-smelling engine," Toprak said. "Diesels are cleaner than gas engines."