By Steve Huffman
shuffman@salisburypost.com
At Team Chevrolet-Cadillac on Jake Alexander Boulevard, Barry and Chris Ervin of Mooresville spent a good portion of Thursday morning shopping for a new car.
A Cadillac is what the retired couple wants, a red one like the spiffy ride they saw on a television ad.
“We’re consumers,” Barry said. “We’re doing everything we can to stimulate the economy.”
They’re also taking advantage of what many market analysts say is a wonderful time to buy a car. Across the nation, auto companies, desperate to recharge a dismal sales year, are trying a variety of enticements to lure customers to the showroom.
The latest of those offers, announced this week, is a job-loss protection plan sponsored by General Motors and Ford Motor Co. GM said it will make nine car payments of up to $500 for customers who lose jobs. Ford is offering payments of up to $700 for 12 months.
The Ervins said they’d heard of that GM offer, but said it had no bearing on their decision to shop for a new car. Because they’re both retired, they don’t have to worry about losing jobs. The money they plan to spend for a car, they said, is secure.
They said virtually none of the offers ó zero percent financing, included ó that car manufacturers are making to the public had an influence on their shopping.
“We’ve got no incentive, except, coming to the dealer and saying, ‘What are you going to do for me?’ ” Barry said.
His wife agreed, chuckling as she spoke.
“We’re bottom-feeding,” Chris said. “We’re going around to different dealerships and saying, ‘Let’s see what we can get.’ ”
The Ervins said that, surprisingly, some dealerships are wheelin’ and dealin’ very little despite the tough economic times.
“Some apparently don’t realize the economic situation we’re in,” Barry said. “They won’t be here when we get through all this. They won’t survive.”
But the Ervins said Team Chevrolet-Cadillac is a different matter. They said they’ve bought from the dealership before and said they’ve always liked the attention and follow-up service they’ve received.
On Thursday, the Ervins paused to praise Wayne Fields, the salesman who was showing them the new Cadillacs.
“He’s very patient,” Barry said, conveying his words to Thom Dillard, the owner of Team Chevrolet-Cadillac, and David Coltrane, the general manager of the business.
“We haven’t bought a car, yet,” Barry continued. “But I think we’re close.”
Dillard, who has owned Team Chevrolet-Cadillac since 1992, said those are the type words that he and other car dealers are longing to hear.
He said American car manufacturers are producing the quality vehicles that shoppers are demanding. Getting them to the dealership is the secret, Dillard said.
He pointed to a Chevrolet Malibu parked just outside the front door to his dealership and bragged that the ride was recently named the North American Car of the Year at the North American International Auto Show in Detroit. Not far away was parked a Cadillac CTS that Dillard noted was tabbed by Motor Trend magazine as its Car of the Year.
Dillard said ó thanks to a strong performance by his service and parts departments ó overall business at his dealership was up 30 percent last year compared to 2007. He admitted, however, that sales were lacking.
“We’re excited,” Dillard insisted. “We think if we can weather this, things will really pick up.”
Not all dealers share Dillard’s enthusiasm. U.S. auto sales are barely running above an annualized pace of 9 million this year. By comparison, car companies in recent years have sold between 16 million and 17 million vehicles. Analysts say the sharp drop suggests that Americans have grown so reluctant to buy new cars that they are even holding back on replacing vehicles that have been in accidents or no longer run.
“For a lot of people, the economy is so screwed up, the last thing on their minds is buying a new car,” even Dillard admitted.
He said GM officials polled consumers to find what it’d take to get them interested in buying a new car. Dillard said the top responses were:
– safety;
– affordability;
– stability and;
– resale.
Dillard said that last response prompted GM to offer a Vehicle Value Protection program by which the company will reimburse a car owner up to $5,000 in trade-in allowance toward a new GM vehicle if, after 30 months, more is owed than the car is worth. The situation is commonly referred to as being “upside-down” in a loan.
On Thursday morning, as Dillard maintained that business at his dealership was anything but woeful, he walked through a crowded waiting room off the floor of the service department.
“Good morning,” Dillard greeted those customers.
Several responded in a like sense.
In the service department, Dillard pointed to a shop full of cars, trucks and SUVs, and a passel of mechanics scurrying to and fro.
“See?” Dillard said. “We’re very busy.”
Just down the road at Cloninger Ford-Toyota, General Manager Nathan Peele said that even with Ford introducing payment protection by which Ford will make up to a year’s worth of payments for those who lose their jobs, reaction to the offer won’t be immediate.
“It’ll be six to eight weeks before we begin seeing an impact with the people,” Peele said.
Both GM and Ford are expected to begin actively advertising the program this weekend.
Peele noted that combined with low interest-rate financing offers and rebates, the payment protection plan might eventually spur buyers into showrooms.
“It’s a combination that might make people move,” he said.
Peele said that while sales at Cloninger aren’t what he’d like them to be, the Southeast hasn’t been as adversely affected by the downturn in car sales as have other parts of the country.
“We’re holding our own,” he insisted.
At Salisbury Motor Co. on West Innes Street, Donnie Clement agreed that reaction to GM and Ford’s Payment Protection program won’t be immediate. He said earlier this week that he and other dealers had just been advised of the program’s introduction, and said it’d be several weeks before consumers reacted.
“Even when they announce zero percent financing, we don’t see people right away,” Clement said.
Last week, President Obama called for stepped-up government support for auto buyers. He announced a government plan to back the warranties of GM and Chrysler vehicles, in a bid to reassure consumers who fear that the companies might file for bankruptcy. He also said he supported proposals that provided generous tax credits to owners who turn in older models for fuel-efficient new cars.
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The Washington Post contributed to this story.