Friday, Jul. 04, 2008
Dealerships deal with slowing economy
Los Baños car sellers face many challenges
Corey Pride / cpride@losbanosenterprise.com
Print
E-Mail
AIM
ReprintEric Scheper has worked at Santos Ford since March.
As the longtime Los Baños business' new general manager, Scheper's job has not been easy. He has to keep sales up during a difficult period of time for the auto industry.
A deepening mortgage crisis, gasoline nearing $5 a gallon and a general economic slowdown that is teetering on recession are not inspiring people to go buy new cars.
"All manufacturers are having a tough time right now with any vehicles that are high expenses of miles per gallon," Scheper said. "The bigger seller is going to be the economy car. Let's face it, our community, even though it's agricultural, a lot of people commute to the Bay Area. The smart buyer right now is understanding they got to get an economy car. It just saves money."
Scheper said Santos Ford has seen a 40 percent increase in the number of economy cars it is selling. He said a lot of vehicles under $12,000 or $10,000 are being sold.
Getting people to buy a new or used vehicle, however, takes some effort.
Scheper came to work Monday morning and spoke with co-workers in the showroom before leaving to cut a radio commercial. With 40 percent of Santos Ford's business coming from people who live out of town, location is what Scheper planned to emphasize in the advertisement. Good customer service is something else he stresses.
"Marion and Michael (Santos) set a pace of higher customer standards. We have people from everywhere come here because we have a lot more personal service."
Hunter Lindemann, sales manager for Harry Marx Chevrolet, Cadillac, GMC, said his parent company's zero percent financing for 72 months promotion "drummed up some business," but in general there's a slowdown in car sales.
Numbers released by the Big Three automakers Tuesday bear out Lindemann's statement about declining sales. In June national sales were down 28 percent at Ford Motor Company, 18 percent at General Motors and Chrysler saw a 35 percent drop for the month.
Lindemann and Scheper are imploring Los Baños residents not to leave town to buy a car.
"There's a lot of commuters out there who buy out of town," Lindemann said. "We aren't seeing those people and that's what's frustrating. The best thing we can do is support out local businesses, because without our local customers we won't be here."
Scheper said Ford dealerships outside of Los Baños are selling the same product Santos Ford is so people are not getting a better deal by shopping away from the city.
"Buying local and keeping your money local, there's a lot to be said for that," Scheper said. "Your tax dollars go right back to the city. It helps your schools out, it helps your roads out, it helps everything else out."
Despite high gas prices neither Scheper nor Lindemann said their dealerships are experiencing any significant increase in hybrid vehicle sales.
"We get a lot of questions. (But) We haven't had anyone who said they wanted a hybrid," Lindemann said.
He said the Harry Marx dealership carries three hybrids that get 21 miles per gallon both in town and on the highway.
Lindemann said what people are looking for are cars with the function of a sport utility vehicle.
"They may be getting a smaller car but they keep their SUV in the garage and drive the family around in it on the weekends," he said.
Scheper said he is able to sell large vehicles to the people in town who are part of the ag industry. Citing Ford dealerships in and near Sacramento that closed this week, Scheper said Santos Ford is doing well financially despite some hard times for other companies.
Lindemann said his dealership is trying to reduce its overhead by decreasing its flooring line.
The city did have one dealership, Los Baños Motors, close earlier this year but its demise was reportedly because of bad management, not the economy.
At Family Motors, a used car dealership on Pacheco Boulevard near Nevada Avenue, Gabriel Guzman acts as one of the managers. He said sales have been down about 30 percent in recent months. He traces the start of declining sales to the start of the city's increasing number of home foreclosures.
"Right now most households are holding on to their wallets," Guzman said.
Enterprise staff writer Corey Pride can be reached at 388-6563 or cpride@losbanosenterprise.com