Despite economic uncertainty, local auto sales hold their own

The advertisements may suggest fast, sleek new models, but if an agency were to create an image for the local automobile industry, the tale of the “Tortoise and the Hare” may be more fitting.

In 2009, Tri-parish auto dealers collectively held their breath and watched from the sidelines as the industry they’ve so heavily invested in plummeted. This time last year, the Obama administration trotted out the Cash for Clunkers program – a stimulus program aimed at ridding the roads of older, less fuel-efficient models and returning buyers to car showrooms around the country.

Cash for Clunkers was effective in convincing buyers who would normally shop for used vehicles to apply the government payment to a new vehicle, but because of its limited reach – roughly 600,000 new cars were purchased across the United States – it wasn’t the boon initially touted by President Barack Obama, according to Paul Taylor, chief economist for the National Auto Dealers Association.

“More cars were crushed last year than we sold,” Taylor said. Approximately 13 million cars fell into the “crushed” category.

In 2009, automakers were forced to streamline production, rethink overhead costs and – after a taxpayer bailout – return to basics.

Taylor said the result has been a slow, but steady climb in sales across the country.

“Certainly, the market has improved from over a year ago, despite the recent news in the U.S. that sales were not as robust as desired in June,” he said.

Key indicators to a strong sales market – employment figures and housing values – have remained intact in south Louisiana. Taylor is quick to note, and local dealers likewise echo, that the Tri-parish auto market continues to hold its own, despite national trends.

“I can only speak for us,” Lafourche Motors Company general manager Jude Chiquet said, “but we’re having a better year. The first quarter was very good, and we had a strong April. I can’t explain it and I’m not asking any questions.

“All I can say is business has been good,” he added. “We just keep working hard and leave the rest in the hands of God.”

In the days after the bailout, local dealers were left frustrated by a shortage of inventory; a situation that Te-Cye Adams, general manager of Barker Buick GMC in Houma, said is finally working itself out.

“Last year versus this year … it should be very close as far as this year’s sales go,” he said. “But it’s not nearly like it was in 2008.”

Hand in hand with the automobile industry’s financial woes were the nation’s banking problems. As the financial crisis took hold, loans for the most basic needs were harder to come by.

“The availability of credit affected the whole industry,” Adams explained. “Fortunately, our local banks remained strong and have continued to help us and our customers.”

Because the Tri-parishes’ economy remained strong and stable throughout 2009, the local market didn’t experience the devastating blows other states reported.

Today’s jobless rate remains low, but with a number of seafood workers out of jobs and the oil industry threatened with a second moratorium on offshore oil exploration, that could soon change.

“We are hearing a lot about the BP situation,” Adams said of the Deepwater Horizon oil spill that has rocked the Gulf Coast. “There’s a lot of concern about what will happen if they’re not able to stop the leak and return people to work.

“Most of us were born and raised here on the bayou,” he added. “To see our way of life and culture threatened and to be told it could be gone for a decade or longer takes its toll. After a while, it begins to affect us all … it hurts our psyche.”

Barker Buick GMC has seen its sales increase over the last 12 months, Adams said. In large part, GM’s decision to reduce its presence by closing some dealerships last year can be credited with drawing customers to the Houma showroom.

“We finished the last two quarters up a little bit,” Adams explained. “Our area of responsibility has increased, too, which helps.”

Barker Buick GMC serves Terrebonne, Lafourche and St. Mary – including Morgan City proper, he said. “Having that larger area has helped us.”

Buick’s new Lacrosse, Enclave and Regal have also helped. And on the GMC side, Adams said the new Terrain shines.

“The demand on those products has really been good,” he said. “That helps.”

Like many local dealers, Adams said Barker Buick GMC’s service department has been busy. Likely a direct effect from people who are taking a “wait-and-see” approach to the local economy and the BP situation.

But NADA’s Taylor said it’s not surprising that dealers are seeing service business pick up.

On average, people hold onto their vehicles longer these days – up to 10 years, he said.

“The typical owner is going to put about 15,000 miles on their vehicle yearly,” Taylor said. “When cars reach the 150,000-mile mark, that’s when they start looking for a new vehicle,” he said.

It’s the knowledge that customers will – eventually – keep coming back that drives Adams and his sales team.

“We have faith in this community,” he said. “They’ve always come back. This is not a community always asking people to help us. We’re Cajuns. We’re strong and determined to do whatever it takes to survive.”

Over at Terrebonne Ford, general manager Mickey Bruce is also excited by the growth he’s seen over the last year. He said Ford’s new line is driving sales.

“I think basically, overall, [the Tri-parish] economy has been good and solid,” Bruce said. “Maybe people were concerned at one point, but I think we’ve sort of seen the dust settle. People have shown they have a lot more confidence.”

And with Ford’s entrance into new segments and markets, customers are choosing American-made vehicles, he said.

“With class-leading fuel economy with just about every product that’s coming out at this point and with the new cars and trucks set to come out, I think the overall quality and the overall look is helping,” Bruce said. “With the technology we have in our product, I think more people are looking at us.”

Taylor said industry leaders are predicting 3 percent growth overall this year, and more improvement in the coming year, which should continue to bolster vehicle sales. And that’s good news for local dealers.

“This industry has been relatively soft for the past two years,” said Lester Bimah, general manager of Barker Honda. “With the stock market up and down every day, there’s uncertainty. And now we have an oil spill and hurricane season.

“There are manufacturer programs that help – Zero Percent Financing and other programs. We know that there’s a large customer base that will only buy Honda. So we go out every day and provide the best customer service we can. As for tomorrow, we just pray,” he said.

Local dealers agree, with a redesigned line and Divine intervention, the road looks bright ahead – even if sales climb slowly.

“We don’t know what to chalk it up to, but whatever it is, it’s happening,” Lafourche Motors’ Chiquet said of business. “And as long as it’s happening, hopefully, we’re doing the right things for our customers to keep them coming back.”