In 2011, northern Ohio new-vehicle dealers bucked the national sales
trend, achieving double-digit growth over the year prior.
"We went into the recession earlier and came out earlier," said Louis A. Vitantonio Jr., president of the Greater Cleveland Automobile Dealers' Association, representing more than 250 dealerships in the 21-county region.
Last year, things evened out a bit with double-digit increases at the national level and single digits (4 percent) locally, he said.
This year, local dealers' new-vehicle sales are mirroring national numbers, Vitantonio said.
"You're looking at now a healthy growth of 8.8 percent over '12 for this market," he said.
Monthly statistics reveal positive signs as well. Franchised new-vehicle dealers in the area covered by the GCADA reported sales of 20,478 vehicles in May compared to 18,286 in May of 2012.
"We expect strong sales to continue through the end of the year," Vitantonio said.
There are more than 748 new-vehicle dealerships in Ohio, employing 36,040 people, according to the National Automobile Dealers Association. The annual payroll of new-vehicle dealerships in the state amounted to more than $1.72 billion in 2012. Total annual sales of all new-vehicle dealerships in Ohio was more than $24.8 billion.
"When you consider the amount of sales tax revenue, corporate tax revenue and payroll tax revenue generated by new-vehicle dealerships alone, it's easy to see just how important new vehicle sales are to our local economy and governments," Vitantonio said.
He said the reasons for the continued growth range from the improving job market and consumer confidence to more financing deals.
He also pointed to pent-up demand.
"The average vehicle age now is approaching 11 years old," Vitantonio said.
"Three years ago, it was closer to 10 years. That span of a year on average age is a huge number. Over time, I think that will come down, Again, that's a factor of the economy and people being able to pay for them. That's telling us people are holding onto their vehicles longer."
Ford continued as the sales volume leader in Northern Ohio, selling 3,721 vehicles in May of 2013 -- up more than 500 vehicles from May of last year and an increase of about 16 percent, the June GCADA report said. Chevrolet, which came in second, also enjoyed strong double-digit growth in the month, registering sales of 2,938 units. Honda edged out Toyota for third place, selling 1,850 units versus Toyota's 1,807 units in the month, with both brands showing growth in the month.
Mentor Mitsubishi is No. 1 in Mitsubishi sales in the state, said Chief Operating Officer Al Zarzour, who also runs Mentor Kia.
"The Outlander Sport has been our biggest seller," a smaller sport-utility vehicle, he said. "At Kia, Sorento, Optima and Soul are most popular."
He also reported positive sales in used car at both locations.
The fuel factor
Fuel prices inevitably affect the industry. However, it hasn't had the damaging effect one might expect, Vitantonio said.
"Certainly, one of the top five things customers are thinking about is fuel economy, but even though we (were) close to the cusp of $4, it hasn't affected sales of SUVs, etc.," he said, noting some families' need for extra space. "Every individual person is looking for something different. Fuel economy has been on their mind, but it's a backseat to the individual purchaser's need for size of vehicle. If commuting back and forth to work, fuel economy is right up there."
Zarzour said gas prices have actually had a positive effect on his sales.
"All of our models are highly rated as far as fuel efficiency," he said.
Junction Auto Sales in Chardon specializes in truck sales, but fuel prices haven't played a major role, Vice President Cliff Babcock said.
"Not as much as you'd think," he said, adding that the dealership has experienced an uptick in commercial truck and van sales.
"It's a good sign for the rest of the economy," he said. "Other small businesses are succeeding."
(c)2013 The News-Herald (Willoughby, Ohio)
Visit The News-Herald (Willoughby, Ohio) at www.news-herald.com
Distributed by MCT Information Services
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