Auto dealers confident
Cook, Steamboat Motors officials expect slow period but not disaster
November 23, 2008
Steamboat Springs — As General Motors, Ford and Chrysler report financial struggles, going as far as to seek federal help, a couple of Steamboat Springs dealerships say those problems aren’t squeezing them.
Steve Dunklin, general sales manager at Cook Chevrolet, Jeep & Subaru, and Jeff Steinke, general manager at Steamboat Motors, said they’re seeing a slowdown but no layoffs or major issues.
“I think the auto industry here is still going to continue to thrive,” Dunklin said. “I think we may be slow for a few months, but I think in spring, it will pick back up.”
Part of the concern, he and Steinke said, is public perception. People with good credit mistakenly think they can’t get car loans, Dunklin said. Plenty of funding sources are available, he said. The lenders are getting pickier, however.
“They now want to see more cash,” he said. “They want to stop some of the ‘sign and drive.'”
Dunklin said people who were having trouble financing vehicles were those who didn’t want to put money down or had not put down money on previous vehicles.
Many potential buyers are hesitating, Steinke said.
“Ford and Chrysler and GM have all raised their rates to the point where a guy with good credit is not getting better interest rates,” he said. “But through the Chase and Wachovia and outside lenders, we’re seeing good interest rates.”
Changes haven’t been dramatic at the dealerships, Dunklin and Steinke said. The Cook dealership has seen some staff reduction through people leaving, but neither dealership reported layoffs. Steinke said he had open technician positions.
Steinke said he’d heard gloomy tales from car dealerships on the Front Range. In some cases, he said, that was a result of overstaffing.
“When you go in to buy car, you don’t meet salesperson, you meet greeter,” Steinke said. “You don’t need greeter, you need salespeople. : A lot of people they laid off, you’re trimming the fat. When sales are down, you cut salespeople.”
Both said activity was picking up at their repair shops.
“One of the things I think has benefited the business as a whole is our service and parts business,” Steinke said. “We started about a year and a half ago to rejuvenate our parts and service business, and thank God, we did.”
Many people are repairing damaged vehicles rather than buying new ones, Dunklin and Steinke said.
Steinke said he also was seeing an increase in rental cars. This is typically a down season, he said, but some business owners are opting to rent vehicles rather than put miles and wear and tear on their own. That was unexpected, he said.
“It’s smart guys making smart decisions,” he said. “They put an extra 500 miles on my cars instead of theirs.”
Steinke plans to reduce his winter rental car fleet. He typically has 50 or 55 cars on hand and will start the season with 40 instead.
Overall, he and Dunklin were optimistic. Steinke said he was confident that the big American automakers wouldn’t tank.
“The infrastructure and the size and the dependent jobs on those – somebody’s going to come in and make those a viable business on some level,” he said. “It’s such a large effect on everybody that I think there will be deals cut.”
Dunklin said he thought the industry would rally after a rough period.
“I believe the sky is not falling,” he said. “However, we maybe have to dodge a little bit of hail.”