Local car dealerships, not immune to a national drop in auto sales, are finding themselves fighting for customers and deals as the industry struggles to bounce back from its slowest month in three years.
An average 6 percent drop in May auto sales nationally surprised many dealers who expected to have a typically busy early summer buying season.
"It was dramatic," said Judy Stetson, a sales associate at Paul Bailey’s Chrysler, Isuzu in North Kingstown. "The first two or three weeks of May were dead, and May is generally fairly good because it’s nice outside and people want to come out."
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Hardest hit by the slowdown were the General Motors Corporation, which experienced a 12 percent decline, and the Ford Motor Company, which reported an 11 percent drop. In all, according to the Autodata Corporation, just over 1.5 million cars and trucks were sold in May – making it the slowest month in the industry since November of 1998.
"Nationally there is a little bit of a downturn," said Chris Hurd, president of Hurd Buick Chevrolet in Johnston. "We have heard that a lot of other dealers are slow and complaining. For us it has been about a 10 percent drop."
No one is quite sure where the slowdown came from. Industry experts cited the conclusion of tax refund season and higher gas prices as possible sources, but according to local dealers it could be anything.
"There is not a lot of science in this," Hurd said. "There are fluctuations based on weather, national news, and things like that. It’s really hard to guess."
Larry Keller, marketing director for Rodman Ford, Lincoln Mercury in Foxboro, Mass., agreed.
"It’s probably a number of things," he said. "Post Sept. 11 fallout from zero percent financing could have taken sales out of the market because a lot of people purchased new last year. The economy is still rebounding… there are lot of factors that can have an impact."
The slow month doesn’t appear to have car manufacturers worried. Ford Motor Company announced that it planned a four percent increase in production for the second quarter, while GM has reintroduced its "lease-pull-ahead" program, hoping to give shoppers an incentive to cut short their leases without penalty and buy or lease a new car.
"We go into this with our eyes wide open. We know that it will remain intensely competitive," GM Chief Market Analyst Paul Ballew recently told the Wall Street Journal. "There are some intense competitive battles out there."
The manufacturers’ push is expected to make the summer months even more competitive for local dealers — something Hurd said his company is ready for.
"GM is in a real mode, they are committed to improving their market share," he said. "That’s good news for the people of Rhode Island because it means great deals."
It seems to be working as dealers are already reporting an increase in June sales.
Stetson believes his customers were busy last month. "My customers that couldn’t get back last month because they were busy with graduations and soccer, they seem to be coming back."
Hurd agreed.
"GM is really aggressive right now and we expect June to be a big month," he said. "June has started out really tremendously for us. It’s been really busy."
