Every time I passed an auto dealership last winter I thought that those guys must be loving the unusually mild and snowless weather. There was no need to move cars for plowing and there were no snow-clogged roads to keep potential buyers at home in front of their big-screen TVs.
Not so fast, says Ray Ciccolo, CEO of the Village Automotive Group, local purveyors of Audi, Cadillac, Honda, Hyundai, Nissan, Porsche, and Volvo.
Ciccolo would have rather seen a normal New England winter; in other words, he’d have preferred to see the snowplow drivers getting a lot more work, plumbers dealing with frozen pipes, and road crews ﬁxing potholes in cycles of deep freezes and thaws.
“Last year was the mildest winter on record,” he says. “That didn’t help car sales. Even if you were driving an old car, it was starting every day and running ﬁne. Most likely you didn’t need a new battery or to get better tires.
“Nor were you trying to move mounds of snow off the car and maybe burning out your windshield wiper motor because you didn’t do such a good cleaning job. Those sound like little repairs, but sometimes they’re the last straw, the one that brings you into the showroom instead of into the service bay.”
Ciccolo, like virtually everyone in the industry, envisions 2013 being a banner year as the auto industry continues to rebound. And he thinks there will be a big push this year.
“At the low point, back in 2007–2009, as an industry we were selling 10 million cars a year. By last year, that number had risen to 14.5 million. This year, the National Automobile Dealers Association is forecasting 15.3 million in sales and other analysts are even more optimistic,” he says.
“That’s a million-vehicle increase. It represents a lot of pent-up demand, which is understandable because the country has an old car population.”
Adding to that number is the fallout from Hurricane Sandy. Most all industry estimates are that the storm damage will generate an additional 250,000–300,000 in sales to replace the widespread motor vehicle losses—vehicles belonging to private citizens, businesses, and government, not to mention the new and used cars destroyed on dealers’lots and in shipping depots.
Even though your 10-year-old car still may be running ﬁne, Ciccolo would love to see you trade it in this winter, and he gives some compelling reasons.
“Number 1, it’s not going to last forever,” he says. “You know that and I know that. But while it’s running well that car will bring something meaningful in a trade because the entire market is short of used cars.”
Ciccolo also cites the march of technology. “I keep trying to convince friends and customers that trading up to a new car brings an amazing upgrade in safety features. I’m telling people that things like BLIS [Blind Spot Information System] and backup cameras aren’t just on luxury cars, that the trickle-down effect has brought them throughout the new car population.”
Cars and Real Estate
It wasn’t all that long ago that the demise of brick and mortar outlets was common talk, even in automotive circles, as dot.coms threatened to take over the retail universe. The prediction was that people were going to order their cars online and somehow they would miraculously be picked up at some delivery boutique.
Funny how that’s worked out.
While many traditional businesses have left the landscape, auto dealers are buying up those properties and continuously expanding their facilities.
Group 1, the Houston-based international automotive retailer that moved into this area and now owns the Ira dealerships (Toyota, Scion, Lexus, Subaru, Audi, and Porsche as well as BMW of Stratham, NH) has invested nearly $40 million in facilities with more in the works.
While the Greater Boston area is a small part of their 111 US dealerships (plus another 11 overseas), Group 1 leaves local management to the locals. New England and NewYork market manager John Hartman encourages New Englanders to start doing their car-shopping homework. “Presidents’ Day weekend traditionally kicks off the selling season,” he says. “We’re like all the local dealers.We load up on inventory and offer great deals. We’re really excited about this year’s outlook for a higher selling rate. The rising tide should lift everyone’s boat.”
However, Hartman has a bit of advice for automobile shoppers who might be waiting for the Presidents’ Day sales.
“Everyone knows there are great deals to be had that weekend, but showrooms can be crowded,” he explains. “Our biggest challenge is to get people to come into the showroom before that weekend and beat the rush.We’ll be promoting that they’ll get the same deals. In addition, they’ll be ahead of the crowds and have a more relaxed experience.” Continued...