Dealers face uncertainty

After attack, consumer reaction hard to gauge

When the wind shifts, Hal Farrington can still see smoke billow from the direction of the Pentagon building. The general manager of Rosenthal Chrysler Jeep in Arlington, Va., works a mile and a half from where the seat of the nation’s military was bombed by a commercial jet.

Except for the explosion that shook the dealership the morning of September 11, the showroom has been quiet. The streets around the dealership were closed after the bombing to let emergency vehicles through.

Farrington said the dealership sold two vehicles in the late afternoon and early evening. It normally would sell 15 to 18 vehicles.

"Being one of the closest dealerships to the Pentagon, you would expect that," said Farrington. "But whether this will have a lasting effect, it’s way too early to tell. It will take a few days for the traffic patterns to readjust" when all the blockades are removed.

Dealers around the country are experiencing the same uncertainty in the wake of the New York City and Washington, D.C., terrorist attacks. In some cases, the mood has been somber, business has been off, and consumers, in a state of shock, have had varied responses to the tragedies.

Daniel Ramirez, owner of Ramirez Ford in Rio Grande City, Texas, said his dealership was on its way to racking up its best sales month ever until the events of Tuesday morning.

He said the store’s best sales month so far was 124 new and used units and that the store was tracking to sell more than 130 units for September. Business was down 50 percent Tuesday and Wednesday at his store, a trend he expected to continue the rest of the week.

One customer who had picked out a vehicle and was approved for credit called the dealership to cancel the purchase, Ramirez said. The customer was afraid of what the future held and decided not to enter into new debt.

"It’s scary," Ramirez said, who along with employees and customers monitored the situation via the TV, radio and Internet at the dealership.

"Normally we submit about 15 (credit applications) to Ford Credit. (Tuesday) we had four; today we have two and one was a carryover from yesterday."

Dave Rodgers, vice president of the John L. Sullivan Group in Roseville, Calif., said customer traffic was relatively slow at the company’s Toyota and Chevrolet stores on Tuesday morning.

The Chevrolet store’s service department normally processes about 100 repair orders a day with most of the traffic taking place in the morning. At 9 a.m. Tuesday, the Chevrolet service department was empty, Rodgers said.

Still, sales were only slightly down on Tuesday. On an average day each of the stores sell about 13-15 new and used vehicles. On the day of the tragedy the Toyota store sold 10 vehicles; the Chevrolet store sold 12, Rodgers said.

"The mood of the employees was somber," he said.

Some in a panic to buy cars

In Grand Island, Neb., where dealer E. N. Roe operates two dealerships, one dealership doubled its sales after the bombings; the other did only a third of its normal business.

Roe Buick Olds Pontiac Inc. would normally sell four cars in a day, but it sold eight cars immediately after the terrorist attacks, largely to retirees. The local National Rent A Car agency also was clamoring to buy rental cars because customers wanted to avoid flying.

"I am amazed," said general manager Doug Somer. "People who were going to take planes don’t want to fly any more. They are instead buying cars."

But at Roe’s other dealership, Grand Island Nissan, business has been slow. The clientele is younger, with less disposable income, and could be holding off on big purchases, Somer reasoned.

On the used car side, Mel Farr, owner of Mel Farr Automotive Group (Ford-Lincoln-Mercury-Suzuki-Hyundai-Kia), based in Oak Par, Mich., said business was steady at his used-car superstore on Tuesday and Wednesday because the store caters to "need" buyers.

"People are not in the mood to do anything except what they have to do," he said.

Sales not the only issue

Greg Goodwin, chief executive officer of the Portland, Ore.,-based Kuni Automotive Group, was thinking about his son, who just flew to New York to go to college. In an e-mail to the chain’s 650 employees, Goodwin encouraged employees to try to continue their normal business routine.

With eight dealerships spread over four states, Kuni executives often must travel hundreds of miles. Goodwin said he would continue to patronize the airlines, refusing to let terrorists change the way he conducts business.

"This (terrorist attack) is about fear," he said. "We are trying to stay focused on getting things done."

Meantime, as the fire engines roar past Rosenthal Chrysler Jeep, Farrington tries to keep the staff motivated. He let some employees go home but has kept the dealership open.

Said Farrington, "We have a job to do."

You can reach Arlena Sawyers at asawyers@crain.com

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