If They Can Make It There

New York Defying a national sales slump, metro New York auto dealers racked up a 6.9% increase in vehicle sales in the year's first quarter, a survey commissioned by the Greater New York Automobile Dealers Assn. reveals. We've been very lucky, because we haven't been hit as quickly as other regions of the country, says Mark Schienberg, association president. The first quarter was staggeringly good

New York — Defying a national sales slump, metro New York auto dealers racked up a 6.9% increase in vehicle sales in the year's first quarter, a survey commissioned by the Greater New York Automobile Dealers Assn. reveals.

“We've been very lucky, because we haven't been hit as quickly as other regions of the country,” says Mark Schienberg, association president. “The first quarter was staggeringly good for us. But April was not as strong.”

The slowing economy is not impacting New York as much as other areas of the U.S., he says. But there still is concern by the association's 650 dealer members in the lower nine counties of the state, who say that, despite strong sales, light trucks are not selling well.

Schienberg credits the high percentage of vehicle leases in the region as a reason for the strong market. Leasing represents 60%-65% of dealers' business here.

Import sales have been particularly strong in the region, especially European brands, he says. The only big drop off is with the Korean brands, down 17%.

Helping boost car sales, New York's economy is being buoyed by foreign tourism attracted by the weak dollar and increased foreign investment. Tourism is a $55 billion industry for the state. The region also continues to enjoy stable property values.

Additionally, motorists in the region rack up comparatively lower mileage on average, lessening the impact of skyrocketing fuel prices.

Declining to forecast what the remainder of the year might hold, Schienberg says his members are digging in their heels, despite their early success.

“Everybody is watching inventory,” he says. “They're ordering only what they can sell, even though interest rates are low. They don't want unsold cars to sit on their lots.”

Gene Donnelly, BMW of North America LLC vice president-northeast region, says while sales from Maine to Virginia have grown 1.5% for the year, deliveries for the 32 BMW dealers in the metro New York area are up almost 6%.

Certified pre-owned sales have spiked 38% year-to-date, compared with 25% nationally.

“We have a more conservative customer base in the tri-state area,” Donnelly says. “We were affected much less by the sub-prime mortgage mess in this (immediate) area,” although Virginia and Maryland were hit hard, he adds.

BMW dealers in the region are optimistic about the future. “Otherwise they wouldn't be investing in their franchises,” Donnelly says.

Volvo Cars of North America LLC sales also are doing better here.

While Volvo deliveries in the year's first five months tumbled 15% nationally, they rose 1% in tri-state metro New York, says Anastasios Panas, executive vice president-sales.

He attributes the region's higher sales to the high number of leases maturing this year. “Even when the economy goes soft, lease owners have to do something,” he says.

But Volvo has fewer leases maturing next year. That could be a problem.

Scott Mackie, General Motors Corp.'s northeast regional vice president-marketing, says GM sales here grew 5.4% in the first three months, while down 7% nationally.

Long Island sales have been especially strong this year, he says, up more than 10%, while deliveries in the rest of the Northeast are down 11.4%.

GM has rung up big gains in compact cars and cross/utility vehicles, while sales of large pickups and SUVs have dropped, Mackie says.

The new Chevrolet Malibu, alone, gained 2.6% market share in March. Other models with strong gains in the region include the GMC Acadia large CUV, up 160%, and Saturn Aura, up 32%.

CTS sales in the New York region jumped 19% through May, compared with year-ago, says Michael Valerio, Cadillac regional sales and marketing manager. In most other markets, CTS deliveries have climbed about 15% in the period.

“The CTS is getting done what we hoped it would get done,” he says.

He says inventory carried by GM dealers in the region ranges between 40-50 days, but admits the truck side is in tough shape.

Mackie forecasts the overall negative impact of the U.S. economy on vehicle sales won't be as dramatic in the metro New York area as with the rest of the country.

Dan Kennedy, regional sales manager for Toyota Motor Sales U.S.A. Inc., agrees.

He says Toyota has been rocked by a 7.7% sales downturn this year nationally, while New York region sales rose 3% through April and 1% through May.

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