Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, February 18, 1992 TAG: 9202180029
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
SOURCE: DANIEL HOWES BUSINESS WRITER
DATELINE: LENGTH: Medium
CAR SALES FINALLY FIND THE FAST LANE
It took insults from Japanese politicians and plunges in interest rates, but sales of new cars in the Roanoke Valley finally spiked in January, dealers said Monday. And so far February looks just as good.At Dominion Car Co. in Salem, retail sales for new and used cars and trucks last month were up 46 percent from January 1991.
"We definitely bottomed out in October," the dealership's president, Andrew Kaplan, said, "and have seen steady increases since October."
It's the same story at Pinkerton Chevrolet-Geo Inc., said President Bill Pinkerton, a newcomer to the valley car business.
"January was much better than October, November and December. January was the best month since I've been here."
Valley dealers registered sales of 493 new cars last month, according to the Virginia Automobile Dealers Association, 96 more than in December. But they recorded 604 sales in January 1991, an anomaly Kaplan and others attributed to the distorting effect of fleet sales.
Efforts to spur the economy seemed to take hold in January, with interest rates on car loans - depending on the lender and its terms - dropping to the lowest point Kaplan has seen in the 16 years he's been selling cars.
Other economic factors that helped auto dealers:
The slide in mortgage rates that spurred a flurry of mortgage refinancings put more money into consumers' pockets, making the idea of buying a new car once again palatable.
Kaplan and his sales staff also saw more customers elect to pay cash for a new car - instead of letting their money languish in bank certificates of deposit, which these days are earning less than 4 percent interest.
The "Buy American" trend appears to be more than talk, some dealers say. "We are getting people driving in here in Japanese imports and talking about trading - and typically are trading," Kaplan said.
But make no mistake: Business is still tough and uneven, the dealers said.
"It ain't healthy out there - don't let anyone tell you it is," said George Logan, president of Valley Motorsport. Still, the Volkswagen, Subaru and Nissan dealer's sales in January were at least 10 percent ahead of the same month last year.
As usual, manufacturer incentives seem to be helping. Volkswagen's ballyhooed "Buyer Protection Plan," unveiled the day after President Bush's State of the Union address, already has helped seal three deals at Valley Motorsport.
Under the plan, which expires March 31, Volkswagen agrees to pay customers' car payments and insurance for 12 months if the customers lose their jobs for "economic reasons" - layoffs, plant closing, corporate restructuring - within three years of the date of purchase. Monthly payments may not exceed $500.
"There's lots and lots of interest, but they haven't been converted to sales yet," Logan said, "so I'm not going to pretend like they are."
First Team Auto Mall, the valley's Hyundai, Suzuki and Isuzu dealer, just finished one of its best weekends ever, President George Pelton said, though he's far from certain the traffic will stay strong.
"I think we're starting to see some recovery . . . , some light at the end of the tunnel," he said.