T H E M O N T H LY B U S I N E S S S E C T I O N F O R L I N N A N D B E N T O N C O U N T I E S A N D T H E M I D - W I L L A M E T T E VA L L E Y
www.democratherald.com/business • www.gazettetimes.com/business
February 2012
Phil Doud, center, owner of John & Phil’s Toyota and Subaru, browses through the selection of cars with customer Steve Oien of Philomath, left, and general manager Vic Eden recently in Corvallis. AMANDA COWAN | CORVALLIS GAZETTE-TIMES
Auto sales switch gears If buyers are ready, lenders are willing —now’s a good time to buy new Doud of John & Phil’s. He said that from 2009-2011, sales were down about 30 or 40 percent. fter several years of pinching penAnother hurdle for auto dealers in the nies, consumers may finally be past year was the Japanese tsunami and feeling confident enough to trade flooding in other countries that produce in their aging autos for a newer — auto parts. and more fuel-efficient — set of “There was a time in 2011 when we were wheels. literally out of cars,” Doud said. “We had That’s the word from national auto anazero Subarus for 30 days.” lysts, and it’s what mid-valley auto dealers Between the lack of supply and the lack are hoping to see as well. of demand, the average age of the AmeriDespite rising gas prices, in mid-February can car has reached an all-time high. Acanalysts J.D. Power and Associates and LMC cording to a January report by research Automotive revised their prediction for the firm R. L. Polk, the average car is now 10.8 coming year, saying that sales have been so years old. strong thus far in 2012 that they expect new However, auto dealers are betting on cars and trucks sold this year to top 14 milthe fact that those older cars are starting to lion. That’s the highest it’s been since 2007, cost their owners more to hang on to than the last year before the U.S. economy fell into to sell, Doud said. recession and auto sales bottomed out, driv“Our service department has been ing U.S. auto manufacturers to the verge of ‘There have been shortages of good pre-owned vehicles. The busy, which means those older cars are bankruptcy. starting to cost more to maintain,” he said. While local auto dealers aren’t ready to devalues of trade-ins are very high right now.’ Older cars also tend to be less fuel-efficlare the hard times over, they say they’ve DREW KOEHNKE cient. Fuel economy is one of the highest seen an uptick in sales recently. GENERAL MANAGER OF POWER HONDA IN ALBANY priorities for new-car shoppers, local auto “We are seeing a genuine resurgence of indealers say, especially with gas prices foreterest from people,” said Phil Doud, president back. cast to rise in coming months. of John & Phil’s Toyota Subaru Scion in Corvallis. “BusiOver the past few years, stricter credit requirements “We have hybrids, we have the Prius, we have cars ness has been a little better in the last 60 or 90 days than had made it harder for some people to get loans to afford that get 40-plus miles per gallon,” Doud said. “Those are it’s been in the past two years.” He expects a 15-20 pera new car. Now, however, rates are the lowest they’ve really catching the attention of the buyer.” cent increase this year over last year. been in the past four years, according to credit bureau The lack of movement in the auto market also means Jerry Gorter, sales manager of Power Auto in CorvalExperian. The average interest rate for a new-vehicle that those cars people have been hanging onto might aclis, says he too has seen an increase in the last two loan fell to 4.52 percent in the fourth quarter of 2011, and tually be worth more than they would have been in more months and estimates that sales are up about 5 percent the Federal Reserve in January committed to keeping affluent times. so far in 2012. rates low through 2014. “There have been shortages of good pre-owned vehiIn Albany, Drew Koehnke, general manager of Power “Banks are lending, Honda Financial is lending,” cles,” Koehnke said. “The values of trade-ins are very Honda, said that from 2010 to 2011, sales of used cars at Koehnke said. “Local credit unions are aggressively high right now.” his dealership doubled, and sales of new cars are up 50 looking for business.” All those factors lead local dealers to believe it’s going percent. And consumers are responding by heading out to look to be a good spring. Buyers returning to lots for new cars, after several years of holding off on major “It’s tax return season,” said Gorter of Power Auto. “People have that money, now they can put something Low interest rates for consumers and an aging fleet of purchases. down on a car.” vehicles on the road are two factors driving the come“People haven’t bought for the last three years,” said
By JENNIFER ROUSE
DAVID PATTON | ALBANY DEMOCRAT-HERALD
A
20132932 6 X 2.00 HOUSE ACCT PAID |