Auto show a ‘Christmas’ present for Naperville car dealers – Chicago Tribune
In Naperville, where sales taxes now generate more money than property taxes, auto dealers are bracing for what some call their annual “Christmas” – people buying cars after visiting the Chicago Auto Show.
“Quite simply – this is what we wait for,” said Wayne Michor, general sales manager at Chevrolet of Naperville. “Typically during the time frame from November through the end of January before the show, we’re fighting Santa and the weather. People aren’t motivated to purchase a car and those that do have to buy – their car won’t start, or they’ve been in an accident or are afraid they’ll have a breakdown.”
Anthony Triner, general sales manager of Gerald Kia in Naperville, said the end of the show signals the dealership’s second best month is coming.
“The car show for us is the sign that the hard times are over,” Triner said. “March is a huge month, following the anticipation that has been built up from the auto show. The closer we get to March, the more stimulation there is to the market as marketing groups spend huge amounts of money and we’re all trying to catch the wave.” Only August eclipses March in sales, he said.
Naperville also reaps benefits because car sales are the number one sales tax generator. Data provided to the Naperville Development Partnership through Melaniphy and Associates Inc., a Chicago-based marketing analysis firm, shows that Naperville recorded more than $1.2 billion in gross sales from automobile dealers and gas service stations in 2014. Schaumburg was the next closest with $987 million in that year.
Christine Jeffries, executive director of the Naperville Development Partnership, said the city is one of the few in the suburbs to generate more money from sales taxes than property taxes. And according to the Melaniphy report, there has been only one year between 2007 and 2014 when auto and service station sales did not increase increase year over year.
“For a while in recent years, each of those money generators were close at about $30 million each [annually], but now sales tax generates more than property taxes, which is why we always tell people to buy local here in Naperville,” Jeffries said. “There is clearly a direct impact when people shop local.”
General Manager James Douvas at Napleton’s Valley Hyundai in Aurora looks to March as his best sales month..
“There is always something like $500 auto show cash that follows dealers into the showroom, and as the bleak weather in November, December, and January breaks, there is more interest in getting out and seeing the new models that are generally hitting the ground,” Douvas said. “Overall, there’s a good feeling these days in the car business, and I feel that last year’s outstanding sales are going to continue as models like SUVs and crossovers remain hot sellers.”
Doug Gerald, president and CEO of the Gerald Auto Group which includes three Naperville dealerships, said foot traffic already has increased, leading him to be “cautiously optimistic” that 2015’s record sales performance will continue.
“Cars are lasting longer than ever, and Americans drove more miles last year than ever before,” Gerald said. “Both of those factors mean that eventually people are going to have to buy another car.”
Joel Weinberger, dealer principal and owner of Continental Motors of Naperville, said new models introduced at the auto show “definitely fuel consumer interest,” but adds there is also a “bleed over” into the used car market.
“People might see the new models in the showroom and feel something is a little too costly and elect to buy a certified pre-owned car that meets their needs,” Weinberger said. “Overall, there is a shorter life cycle to models and people are used to seeing new things or products that reflect shifts in the market.”
Manufacturers seem to be employing a new marketing strategy that introduces cars one to two years ahead of the current model year.
“From a consumer standpoint, someone can drive a car for two years and if the mileage is low, it still looks like a newer car with less depreciation,” Triner said. “From the manufacturing standpoint, it means having a production run of maybe 18 months or more and less cost for change-outs.”
Jeffries said there are at least 20 auto dealers in town and that the amenity of having a test track available “which keeps cars off the streets” adds to the local buying experience. The track, located on the south side of Jefferson Avenue between Fort Hill Drive and Ogden Avenue, is accessible through member auto dealers..
“We’re able to track usage on the test track and we’re expecting to see a bump in terms of its usage following the auto show,” Jeffries said. “Now that winter is moving on, people are looking for a fresh new vehicle and are going to find a great selection.”
David Sharos is a freelance reporter for the Naperville Sun.