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Officials: Now is time to purchase a vehicle

Tuesday, January 6, 2009

Debbie Ruth of Scott City watches as Mitch Diebold, finance manager at Autry Morlan in Sikeston, fills out paperwork to finalize the purchase of her vehicle. Auto industry officials say now is the time to purchase a vehicle due to rebates and other promotions offered by dealerships.
(Photo by Leonna Heuring, Staff)
Auto industy is fighting for business leading to many rebates, incentives

SIKESTON -- Despite a nationwide drop in 2008 sales, officials in the auto industry say now couldn't be a better time to purchase a vehicle.

"GM (General Motors) is out there fighting for business. They've had more rebates on vehicles than I've ever seen, and I've been here for 30 years," said Jeff Williams, general sales and service manager at Autry Morlan in Sikeston.

Interest rates through local banks are as low as they've been in probably three years, Williams said.

"I think right now is best time to buy a vehicle," Williams said.

Vehicle sales have declined sharply this year, plunging tp their worst lowest level in more than 20 years.

Chrysler LLC said Monday its December sales dropped 53 percent because of the recession and fewer fleet sales, while Toyota Motor Corp. reported a 37 percent slide and Honda Motor Co. said its sales tumbled 35 percent.

Ford Motor Co.'s U.S. sales fell 32 percent in December. General Motors Corp. and Nissan Motor Co. both posted 31 percent declines.

Ford's sales for 2008 fell 21 percent from a year earlier, keeping the Dearborn automaker in third place in the U.S. auto sales race, falling behind Toyota for the second straight year.

Toyota's 2008 sales fell 16 percent to 2.22 million, compared with Ford's 1.98 million. Detroit-based GM's 2008 sales totaled 2.95 million, down 23 percent from the year before. Honda's 2008 sales fell 8 percent.

The auto Web site Edmunds.com predicted sales for the full year will total just over 13 million, down 18 percent from 2007 and the lowest level since 1992.

Subaru of America Inc. said its U.S. sales crept higher in 2008, making the Japanese company likely to be the only major automaker with a yearly sales increase. Subaru's U.S. sales rose by 0.3 percent to 187,699 vehicles from 187,208 in 2007, as consumers snapped up its top-selling Forester and Impreza models.

''We expect the first few months of 2009 to feel much like last three months of 2008,'' Emily Kolinski Morris, Ford's senior economist, said during a conference call with reporters and industry analysts.

GM sold 220,030 light vehicles in December compared with 319,837 a year earlier. The recent month's results were boosted by heavy sales incentives, including financing offers announced near the end of the month after the Treasury Department said it would give $5 billion in federal aid to GM's ailing financing arm, GMAC LLC.

The sales slump continues to mean good deals for consumers. Aaron Bragman, automotive marketing research analyst for IHS Global Insight in Troy, Mich., said large incentives such as zero-percent financing and rebates will continue well into 2009 as automakers try everything they can to boost sales.

Full-size truck incentives ran from $7,000 to $8,000 in December, and Bragman expects that to continue all year as the economy fails to improve.

''You look in the paper and the deals on brand new GM pickups are astonishing,'' he said. ''The discount that you get buys a heck of a lot of gasoline.''

Debbie Ruth of Scott City didn't have a car, she said. On Monday, she finalized the purchase of a 2002 TrailBlazer Monday at Autry Morlan in Sikeston.

"Of course, you're scared to death," she said about purchasing a vehicle. "... But it's so exciting."

Autry Morlan has managed to fare better than the national trend and even some of its regional competitors, Wiliams said.

"Last month, we had one of the best new car months we've had in a long time. In the past two or three months, our new car sales have been up," said Williams, who attributed the sales to the dealership's large inventory of about 300 new vehicles.

However, before that, sales were down, Williams said.

"We've had a little sales decrease over the year, and I blame 99 percent on the credit with people not being able to get financed anymore. The lenders have really tightened their belts on loaning to folks. It looks to me it will stay that way for a long time," Williams said.

Auto dealers hope to find relief with a $5 billion government bailout aimed at reviving GM's ability to make car and truck loans.

GMAC Financial Services, GM's troubled financing arm, loosened its tight lending standards on Dec. 30, which in recent months have made it more difficult for would-be car buyers to get loans. GMAC's move marked the first time a financial institution has said it will use money from the $700 billion bank bailout to offer more affordable credit to consumers.

"If GMAC would've went out, there would've been a lot of dealerships in trouble. There's a lot of dealers out there not financially sound right now. We're not one of them," Williams said.

Detroit-based GM said it was offering zero-percent or low-interest financing on some slower-selling 2008 and 2009 models over the next week -- a promotion made possible by the government bailout provided to GMAC.

"There was always some concern through the whole GM dealer body plus the consumers of whether GM, Ford or Chrysler would be in business. I never felt any of the three would go out of business," Williams said.

Over the past year, Williams said he had only three or four customers who worried about buying a GM car.

"They'd ask if GM was going out of business," Williams said. "But I think most people realize what's going on, and it's not going to fold. GM has way too many assets to let the company fold down; it's big in European markets and all over the world and has lots of property."

Unfortunately a lot of the smaller dealers are going out of business, Williams said.

Locally, longtime dealerships Galemore Motor Co. and Courtesy Ford Inc. in Charleston and Chevrolet GMC Trucks Inc. in Caruthersville closed their doors in 2008.

"We've been through a lot worse than what we have this year," Williams said. "It's like the stock market. Business is good and it goes up, and then it goes back down.

"This no worse than when it happened once in late '70s, and couple times in '80s and three or so times in the '90s," Williams said. "We've managed to stay around."

The Associated Press contributed to this report.