About 30 people have drifted through the Carolina Volkswagen dealership on Independence Boulevard on Saturdays this month, up from the low teens in February. Sales have climbed 20 percent, too, and managers have called back two salespeople who'd been laid off.
“This contraction,” general sales manager Lowell Bockert said one recent morning in his office, “has allowed the healthy car dealers to survive.”
Recent months have been dismal for car dealers nationwide. Sales have plunged to record lows. The federal government has poured billions into struggling automakers, and President Obama said Monday that some of the leading U.S. car companies might have to file for bankruptcy protection.
But as consumers pull back on buying cars, some local dealerships say they're not suffering as much as the rest of the industry. According to new data from market research firm Experian Automotive, foreign brands such as Volkswagen, Toyota and Infiniti have become more popular with buyers in Mecklenburg County. Each gained market share from January 2008 to January 2009, while domestic brands such as Chevrolet and Ford have lost market share, the data show.
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The dealerships having the most success say they're attracting customers who are after the best deals, used vehicles, lower-end models and brands with good reputations for safety and reliability.
At Carolina Volkswagen, Bockert says a growing number of customers are trading their Lexus, Infiniti or Acura for a new Volkswagen, hoping to get a similarly reliable car for a lower price.
The dealership is also seeing more leasing as consumers push for lower monthly payments. Leases are making up 60 percent of sales these days, up from 30 to 40 percent in the past, he said.
While sales are down overall – as much as 7 percent from previous years – those efforts, combined with the uptick in traffic from February to March, have left Bockert feeling optimistic, he said.
One of the dealership's recent customers was Kristin Mack, 31, a stay-at-home mom who traded in her Jeep Commander for a Volkswagen Routan minivan. She said she was attracted to the additional space for her two children and options such as a dual DVD player.
“Obviously, now is a good time to buy,” she said. She'd considered a GM sport-utility vehicle, but found the Routan's price more reasonable, she said. The uncertainty surrounding domestic automakers also steered her toward the foreign brand, she said.
Overall, the auto industry is reeling. In Mecklenburg, new-car sales fell 41 percent from January 2008 to January 2009, roughly mirroring the 37 percent drop industrywide. Used-car sales dropped 15 percent in Mecklenburg, the Experian data show. Consumers are cutting back because of layoffs, tight credit and sliding home values.
But for those able to buy now, those struggles translate to plenty of deals.
“Consumers really feel like they're in the driver's seat,” said Jesse Toprak, an analyst at Edmunds.com, a Web site that offers advice on buying cars. “For the most part, that is a correct assessment.”
At Scott Clark's Toyota City in Matthews, more than 100 people visited on a recent Saturday, and 28 bought cars, salesman Darren Robinson said. Toyotas have always been popular, partly because of the cars' reputation for safety, he said.
Buying habits have changed, though, with more consumers opting for used cars, Robinson said, bringing used-car sales at the dealership even with or ahead of new-car sales for the first time.
Not every dealership has thrived.
About 25 of 700 N.C. dealerships closed in 2008, according to the N.C. Automobile Dealers Association. And at least 30 or 40 Charlotte-area dealership employees have lost their jobs recently because of the economy, Loretta Allman of the Greater Charlotte Automobile Dealers Association estimates.
“I think the economy's affected every car line,” she said. “But domestics have been more challenged.”
Part of the reason is the bad news that's swirled around U.S. manufacturers, leaving some car shoppers worried that if they buy a GM product, for instance, their warranties might be meaningless in the near future. The announcement Monday that the government will back warranties should help allay some fears, she said.
“People are still afraid,” Allman said. “It's consumer confidence. People just are afraid to buy anything.”
At Town & Country Ford in Charlotte, about one of 20 people visiting the dealership buys a car, down from one in three in years past, salesman Nathan Nejberger said. Ford dropped in popularity with Mecklenburg buyers from January 2008 to January 2009 for both new and used cars, the Experian data show.
“We are still experiencing a tremendous credit crunch,” Nejberger said.
The dealership is counting on Ford's incentives, such as employee pricing and rebates, to turn things around, he said. The manufacturer's new products, featuring more hybrids and gas-efficient models, could also be more attractive to today's buyers, he said.
“I feel that we are beginning to see signs of a slight improvement in the car sales end,” Nejberger said, “and I'm hoping the overall economy will improve.”
Customers' search for the best value has driven some to Lake Norman Infiniti, said Rick Zoerb, the dealership's owner and general manager. He expects to sell more than 100 cars this month, up from 74 in March 2008.
“When everybody is typically crying the blues around town, we're not seeing that as much here,” Zoerb said.
Infiniti, an “entry-level luxury model,”is drawing some customers from pricier lines, he said. More of his customers are also choosing used cars, by a three-to-one ratio, he said.
While some Mecklenburg dealers are optimistic, they're careful not to say the recent increase in traffic means the end of the downturn. Typically, winter is slower than summer for car sales, and March usually kicks off the spring selling season, they said.
Pent-up customer demand and tax refunds rolling in could also account for the uptick, they said.
Automakers and analysts have predicted sales will rebound in the second half of this year as lending and the economy improve.
Zoerb, who's done business through past recessions, sees downturns as a chance for the strong dealers to emerge stronger, he said.
“This is good,” he said. “This is going to weed out the businesses that aren't doing business correctly.”