Local car dealers avoid national struggle

Published 10:28 am Wednesday, October 29, 2008

Dave Christiansen, sales manager at Sherrell Chevrolet in Hermiston, stands in front of a Chevy Malibu, which he said is one of the dealer’s best-selling cars recently. <br><I>Staff photo by Sarah Britain

Business has slowed recently for a few Hermiston car dealerships, but most still consider themselves fortunate.

In the wake of a near-frozen credit market and continuing financial turmoil, they know things could be worse. A lot worse.

But several local dealers say they’ve been protected by a number of factors to keep sales relatively steady, including the area’s agricultural base. That’s helped keep truck sales from plummeting as they have in more urban areas, said Dave Christiansen, sales manager at Sherrell Chevrolet in Hermiston.

“A lot of customers here need trucks to do their jobs,” Christiansen said. “They can’t farm in a car.”

But even as dealers here have managed to weather an economic storm relatively unscathed, national trends don’t reflect that prosperity – many lots already suffer crippling slowdowns. In September alone, 61 auto dealers either closed or downsized, according to the National Automobile Dealers Association. Nineteen in Oregon have closed their doors so far this year, said Campbell Motors President Larry Campbell.

Christiansen said his dealership’s sales slowed in recent weeks, but 2008 remains ahead of last year. He attributed some of that success to longevity and familiarity. The company started in Hermiston more than 65 years ago, he said, giving it an advantage over a newer dealer people might not know as well.

“Reputation is very important,” he said, adding most urban customers don’t establish any kind of familiarity with a company like a smaller community can. “I think it can make a big difference.””A lot of customers here need trucks to do their jobs. They can’t farm in a car.”

Dave Christiansen,

sales manager at Sherrell Chevrolet in Hermiston

Sherrell sales associate Kevin Fisher agreed. Of the 250 sales he made last year, he said 140 came from repeat customers.

“We have such a great clientele base, we’re pretty consistent throughout the year,” Fisher said.

Most dealers, however, have made some changes to stay in step with shifting demand.

Campbell said Campbell Motors now stocks more economy cars with better gas mileage, vehicles people have gravitated more toward recently. The dealership now also purchases more mid-age used cars in the range of about 2000 to 2007, he said, focusing less on newer models.

Campbell’s most popular car? The Toyota Prius hybrid.

Christiansen said Sherrell Chevrolet also has seen an increase in used car sales. But most customers aren’t trading their trucks or sport utility vehicles in for a smaller car, he said. Rather, they’re buying a second or third car as a more fuel-efficient alternative.

Other factors make now the best time in recent memory to buy a truck or used car, said R. James Harvey, general manager of Tom Denchel Ford Country in Hermiston. Falling prices and larger company rebates offered on trucks have pushed many to take advantage, he said.

“It’s about the biggest buyer’s market I’ve seen,” Harvey said.

Harvey said his dealership’s 2008 sales are up about 6 percent from last year to this point. Campbell estimated Campbell Motors at “average or just slightly below average.”

But tight credit remains an obstacle for some potential buyers, Fisher said. He used GMAC as an example, saying the financing business has raised its standards for auto loans. Before, a customer with a credit rating in the mid-600s would have little problem securing a loan. Now, that’s not the case.

“Anything lower than 700, they’re not going to touch right now,” Fisher said. “That satisfactory isn’t cutting it right now.”

Still, people with better credit shouldn’t worry, Christiansen said.

“The folks that have good credit can still buy a car,” he said. “The ones whose credit is challenged are having a harder time because banks have tightened up.”

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