Business

Auto sellers shifting gears

The GMC Yukon seats six, weighs nearly three tons and gets about 14 miles per gallon of gas in the city and 20 on the highway.

When Paul Loudner began selling cars five years ago, he sold them “like there was no tomorrow.”

“Now, everything's about fuel economy,” he said, leaning against a shiny black Chevy Equinox SUV beneath the canopy of Ben Mynatt Chevrolet in Concord.

With gas topping $4 a gallon, customers are seeking fuel-efficient cars like never before. But as Loudner scanned the sales lot Saturday in the harsh noonday sun, it was clear there are plenty of gas-hungry SUVs left to sell – rows of them, solid and imposing as linebackers with blunt faces and tall, squared posture.

As a result, dealerships are devising new sales strategies. Where they once drew buyers by highlighting SUVs' rugged appeal, they're now stressing the fuel efficiency of smaller vehicles. And they're offering deep discounts to unload the newly unpopular SUVs and large trucks.

A GM sale offering zero-percent financing or rebates of up to $7,000 on trucks and SUVs ended Monday. Ford has been offering employee pricing on its F-series trucks. And Chrysler is giving away $2.99 a gallon gas for three years with the purchase of most new cars.

Is it working? Nationally, it's too soon to tell; car manufacturers are set to release June sales figures today.

At Mynatt Chevy and its sibling Pontiac/Buick/GMC dealership next door, though, salespeople and managers say they believe the perks are driving sales – and they're grateful for the help.

U.S. automakers have long relied heavily on truck sales. But in May, the most recent month for which data is available, General Motors' truck sales were down 39 percent, while sales of more fuel-frugal cars such as the Chevrolet Malibu, Aveo and Cobalt were all up.

“(The economy) is very challenging, it really is,” said Cyndie Mynatt, president of the dealership group, which also includes a used car lot in Kannapolis and Nissan dealership in Salisbury.

Mynatt's Pontiac/Buick/GMC dealership sold 8 percent more cars as of the end of May as it had the year before. The Chevy dealership, founded by her father in 1976, has sold 32 percent less, she said.

Though Mynatt has seen shifts in the industry before – to lower interest rates in the 1980s, to SUVs in the 1990s – the rise in gas prices has proved to be the most sudden change. It's also the most likely to fundamentally change her business in the long term.

“There's always some rock in the road,” she said. “Right now it's the price of gas. (But) car people are the most entrepreneurial people in the world, and we will figure out a way through this. We'll be better coming out the other side; I just believe it.”

To transition, the dealership is touting fuel economy whenever possible, passing out tables demonstrating gas savings and a “Fuel Advantage Reference Guide” brochure that contrasts GM cars with competing models. Even the Yukon warrants a mention: “Better available fuel economy than any other competitor.”

They're being realistic about fuel, too. On the lot, Ron Morrison, who was helping a friend look at a Pontiac G6, asked salesman John Pleasants whether a V-6 engine did anything more than provide more passing power on the highway. “Yeah, burn more gas, to be honest,” Pleasants replied.

Also important is keeping small cars in stock. That's a major task, given that car lots across the country are selling them nearly as fast as they arrive and are constantly hungry for more, Chevy dealership sales manager Joe Bonadonna said. Mynatt Chevy, for instance, had only one 2008 Cobalt – a compact car – on the lot, although they said they could find additional choices from other dealers.

In addition, the approach involves offering low prices on SUVs. A champagne-colored 2008 Chevy Tahoe with leather seats, for instance, was selling for $33,315 Saturday, nearly $10,000 below the sticker price.

Families and casual buyers that once bought SUVs for style, comfort and safety are particularly reconsidering their purchases, salespeople said. However, many customers continue to need trucks for work, and the new deals are proving a lure for others.

“The zero-percent financing got me in here,” said Michael Ritter, 31, of Concord. The incentive, he said, was the push he needed to trade his 2007 Hummer H3 for a new Silverado full-size pickup.

The truck offers more room for family outings, household tasks and hauling, he said. Because it will be used for mostly short trips around town, he said, gas prices weren't a major issue, although the Silverado does get slightly better mileage than the Hummer – 18 miles a gallon highway, compared with 15 to 17. But for commutes to work at a door distributor in Greensboro, he said, he's looking to trade his Pontiac G6 for even more fuel-efficient car.

Gas was also on the mind of Lew and Donna Davidson of Concord, who found out about the GM sale via e-mail and left Saturday with their fourth Tahoe – the sole hybrid the dealership had in stock. It gets about 22 miles a gallon, up from the 14 to 20 the standard model receives, and was eligible for only a $4,000 loyalty discount, for current GM customers.

“We're very, very concerned about this gas price situation and the price of fuels,” Lew Davidson said. The hybrid, he said, allows them to keep what they've loved about their previous Tahoes – rugged and long-lasting cars they used to tow horses and grandkids – while being more environmentally conscious.

By the end of the day Saturday, the Chevy dealership had sold seven vehicles – two used cars, a used truck, a used SUV, two new trucks and the Tahoe hybrid.

And though that still left plenty of SUVs available, those there to sell them believe with a salesperson's optimism that they'll find good homes – as long as the price is right. “There's a buyer for every vehicle on this lot,” Loudner said.

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