Car sales robust as economy improves – The Newark Advocate

Posted: Monday, July 28, 2014

Licking County residents, on the verge of a breakup with the U.S. auto industry six years ago, have fallen back in love with their vehicles.

New car sales in Licking County have risen six consecutive years, since the recession and near bankruptcy of General Motors and Chrysler worried auto suppliers, dealers and employees, especially in the Midwest.

Nationwide,auto sales increased 4.3 percent compared with the first half of 2013, but in Licking County, sales jumped 12 percent compared to a year ago and 81 percent since 2009.

The increase in new car sales comes as cars on the road are older than ever before, averaging 11.4 years in the U.S.

Most economic indicators have improved greatly since the recession, with home sales and building increasing while bankruptcies, foreclosures and unemployment are declining.

Local experiences

Brian Jones, general manager at Tri-County Chrysler, explained the reason for the apparent contradiction between surging new car sales and older cars on the road.

“A lot of the consumers are not trading cars in,” Jones said. “They’re handing them down. A married couple with three or four kids is passing that car down to a child. That’s where that number is conflicting.”

Tri-County Chrysler sales are up 200 percent versus last year as consumers take advantage of interest rates as low as 1.47 percent, Jones said.

“A lot of the new cars are for college students,” Jones said, who are buying new instead of used because of the warranty.

“The economy is getting better. Everything is looking up and looking brighter, and that’s a plus for all of us.”

There were 2,171 cars sold in Licking County during the second quarter compared with 1,775 in the second quarter of 2013 and 1,121 in 2009.

John Hinderer, owner John Hinderer Honda, said dealers are enjoying business they would normally have captured a few years ago if not for the recession.

“There is a lot of pent-up demand,” Hinderer said. “It’s hard to know how long the pent-up demand will fuel our growth.

“The business is trending up, for sure. The car business is prospering nationally. We’re just sharing in that.”

Honda forecasts the last half of year will better than first half, nationally, Hinderer said.

“We’re running ahead of their (national) curve now,” Honda said. “Central Ohio is a relatively good area.”

Doug Moore, general manager at Mathews Ford, said it has not seen a huge surge in sales, but did not experience a big downturn, either.

The reason cars on the road are older, Moore said, is because of vehicle durability and the economy.

“I think as time goes on, cars are made better and last longer, and people aren’t confident with the economy, so they kept them longer,” Moore said.

Car repair business

Larry McKee, who plans to retire soon as owner of Larry’s Automotive, in Newark, said he’s still waiting for the economic recovery.

“Here, the recession has never ended,” McKee said. “It’s still going on for us and a lot of repair shops are in the same boat.

“A lot of it has to do with unemployment. A lot are still unemployed, and if they have a job, it’s minimum wage and they can’t afford to fix their cars.”

Newer cars don’t need as many repairs and people can’t afford to fix older cars because repair costs can exceed the value of the vehicle, McKee said.

The theory that repair shops should be flourishing because people are keeping cars on the road longer does not apply, McKee said. He had five employees and now has two.

“It’s not working that way here,” McKee said. “I used to make good money. Now, I’m supporting the place.”

McKee, 72, in business since 1971-72, plans to retire this year; his son, Brian, will take over.

Rod Amspaugh, parts sales manager at AutoZone, in Heath, said he has seen people holding onto cars longer.

“With the economy the way it is, everybody is staying with the old,” Amspaugh said. “They’re actually not as expensive repairs because a lot of them don’t have all the electrical sensors like the newer cars. The expense of repairs in newer cars is astronomical.”

James Hostettler, owner of Good Guys Garage, open two years in downtown Newark, said the car repair business is hard to predict.

“Unfortunately, there’s no rhyme or reason to our business on repairs,” Hostettler said. “Cars are being built to last on the road longer, and people can’t afford new cars.

Business has improved in two years, with word-of-mouth helping, Hostettler said.

“We’re definitely better,” Hostettler said. “Some of that is because of being in business longer and the economy a little better.”

Some people spend money on preventive maintenance, Hostettler said, while others prefer to take their chances.

“Repairs will eliminate major breakdowns,” Hostettler said. “Major breakdowns are normally caused from negligence. Not always.”

kmallett@newarkadvocate.com

740-328-8545

Twitter: @kmallett1958

First half economic report

New car sales

The year total for 2014 is projected based on the first-half total.

Source: Licking County Clerk of Courts

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