With cash for clunkers over, traffic slowed at auto dealerships today, as expected. But dealers say the gradual recovery in sales they saw at the beginning of the summer will resume soon.
Obviously, theres a meltdown, said Ron Tonkin, whose 17-store dealership group in Portland, Ore., will post its best new-vehicle unit sales month ever in August. I would expect its going to be a very quiet month compared to the biggest-volume month weve ever had.
Tonkins stores sold 1,098 new vehicles from July 25 to Aug. 24, the period in which they did cash-for-clunkers deals. More than 700 of those vehicles were replacements for gas guzzlers that consumers traded in for vouchers of $3,500 or $4,500.
It looks like a bomb went off at most of our stores, Tonkin said. Both of his Honda outlets have fewer than 20 new vehicles in inventory, while his Mazda and Toyota stores have about 30 vehicles left.
The cash-for-clunkers program spurred Julys U.S. light-vehicle sales to an 11.1-million-unit sales rate, the highest since last September. Analysts say Augusts rate will be even higher. Consumers last day to do a cash-for-clunkers deal was Monday. Dealers must submit requests for reimbursements by 8 p.m. today.
During the expected sales slowdown, dealers say they are waiting to replenish inventories and receive federal reimbursements for consumer vouchers granted as part of the cash-for-clunkers program. Tonkins stores are waiting for more than $3 million in government payments.
After an all-nighter
The slower traffic today was like a hangover for some of dealer Ben Freelands employees. They stayed at Freeland Chevrolet Superstore, near Nashville, until 4 a.m. today, filing the stores last 14 deals, half of which they had sold earlier Monday.
I think just a little bit of a lull today and well be back to business, Freeland said, adding his employees were grateful for the end of the cash-for-clunkers paperwork that coincided with the sales lull.
Freelands store sold a few new vehicles today, and he said he thinks sales will return to their pre-cash-for-clunkers levels. His store sold 70 new vehicles in June, which was better than a year earlier, when the store was part of now-liquidated Bill Heard Enterprises Inc.
Sales will improve, Freeland said, because most of the cash-for-clunkers deals went to consumers who otherwise wouldnt have been in the market for a new vehicle.
I think it improved everybodys mind-set that its OK to go out and buy a car, he said.
John Rogin, who owns a GMC store and a Buick store in suburban Detroit, said he thinks the cash-for-clunkers program pulled from the typically necessary end-of-model-year clearance sales.
But he said he has hope that a genuine recovery in sales is under way. Between 6 p.m. and 8 p.m. Monday, his Buick store sold eight used vehicles, an unusually high number.
They were parking next door and walking across. I have not seen a used car lot that busy in maybe 10 years, Rogin said. The sales staff couldnt even come into the store to wait for customers. They were all out on the lot.
The demand for used vehicles has continued today, Rogin said, mimicking the spike in used-car demand that has preceded recoveries from slow sales periods hes experienced in the past.
Dealer Sandy Sansing, who owns Chevrolet, Nissan, Mazda, BMW and Mini stores in Pensacola, Fla., said he thinks the market will go to its pre-cash-for-clunkers levels, when demand was hovering at 27-year lows. But that demand will gradually increase as other consumers come back into the market.
Said Sansing: Everybody doesnt have a clunker. Weve got to remember that.