Bay Area auto market makes a rebound
Uptick in quarterly sales since 2009 signals a strengthening economy
The Bay Area is proving to be a key market in the resurgence of the national auto industry, and the opening of new showrooms is a clear sign there is an upturn in the automobile market in and around San Francisco.
“We’ve all heard the anecdotal evidence that the California auto industry is recovering in a big way,” said Brian Maas, director of government affairs for the California New Car Dealers Association (CNCDA). “From 2008 to 2011 we lost some 350 dealerships (or stores) in California. The fact that the Bay Area shows only a net loss of two stores indicates that the industry is coming back and no doubt reflects the fact that new dealerships have opened in the last 12 months.”
According to CNCDA, vehicle registrations in the state have been on the rise for the past four years. Light-vehicle registrations for California in the second quarter of 2009 reached 232,076 and this year hit 432,814 in the same three months.
“Our industry is leading the economic recovery as people return to the marketplace to purchase new vehicles,” said Maas. “With statewide new car sales expected to return to 1.5 million units this year from a low of just over a million in 2009, there is clearly more demand for vehicles and therefore more opportunities for new stores, especially in a part of the state that is recovering faster than other areas.”
After several years of dealership closures — the decimation of Oakland’s Auto Row comes to mind — the tide seems to be coming back in. In 2012 Fiat opened new dealerships in Burlingame, Newark and Berkeley, and all three have experienced significant increases in new car sales since opening their doors.
Things are looking up for 2013 as sales continue to improve.
“We are definitely selling more cars than we did back in ’09,” said Kent Putnam, owner of Putnam Automotive, which has nine dealerships around the Bay Area. “Fiat just opened in Newark two months ago and they are doing well. There is a lot of cool product coming out — interesting engines, new power trains and hybrid diesels that I think people are going to want. Fiat has a 100-percent electric car; they are actually testing those cars on our property right now. A longer-range diesel hybrid gets something like 85 miles to the gallon. That’s what keeps us going: new and fresh and better ideas and innovations.”
According to CNCDA’s Maas, “The sales increase is due principally to three factors: dealerships are more responsive to consumer needs coming out of the recession, manufacturers are making better product with more features at attractive prices and pent-up demand for new vehicles — following the low point in sales in 2009 — have all combined to lead to the sales recovery.”
Things are looking up for 2013 as sales continue to improve. According to the opening CNDCA’s second-quarter Auto Outlook, “This was the thirteenth consecutive quarterly increase for the market, going back to the fourth quarter of 2009. The increase for all of this year is now expected to reach nearly 20 percent, with another increase likely in 2013.”