Jump in local auto sales indicates improvements in economy

A strong acceleration in auto sales this year - in high double digits for many - has given Hampton Roads car dealers reason to believe that economic recovery is back in drive.

Local consumers drove away with 21,189 new vehicles in the first six months of this year, 9 percent more than in the same period in 2009, according to data from Auto-Count, a unit of the credit reporting bureau Experian. A dozen dealers saw new-car sales gains of more than

50 percent.

Those selling Ford, Hyundai and luxury brands including Mercedes, Infiniti and Audi experienced the biggest jumps. Even Toyota, beleaguered by safety recalls and quality concerns early in the year, sold 454 more cars and trucks between January and June than in the first six months of 2009, a 16 percent gain.

"Things are improving, and people are starting to come out and look again," said Nathan Drory, president of the Charles Barker dealerships in Virginia Beach and Newport News.

Charles Barker's sales soared 73 percent for its Infiniti dealership, 29 percent for Lexus in Virginia Beach and 26 percent for Toyota, the AutoCount data showed.

The AutoCount information comes from Department of Motor Vehicles registrations and usually lags about a month behind actual dealership sales. It showed the biggest jump at Cavalier Ford, with a nearly 114 percent increase in sales at its dealership that moved from Portsmouth to the Chesapeake Square area a year ago.

Steve Klimkiewicz, vice president of Cavalier Auto Group, attributed Ford's sales gains partly to consumers' desire to support the only major U.S. auto maker that didn't receive federal funding to stay afloat.

"The brand is obviously hot right now," Klimkiewicz said. "There's a strong positive perception of the company from not taking money" from taxpayers.

At least once a week, a Beach Ford customer praises the manufacturer for declining the government bailout, said Tom Barton III, the Virginia Beach dealership's president. Beach Ford's sales grew 58 percent in the first half of 2010, and the Barton family's Beach Ford Lincoln Mercury dealership in Suffolk tallied a whopping 72 percent increase, the Auto-Count data show.

"It's good to be a Ford dealer right now," Barton said.

Pent-up demand from consumers who held onto older cars longer also helped boost business, he said. A decade ago, his dealerships rarely took trade-in vehicles that were older than 10 years. Now, they're seeing models from 1997 and 1998.

"Most families we talk to are still very cautious, but not overly," Barton said. "They certainly feel better than last year."

Luxury car makers enticed buyers with new models, dealers said. Lexus and Infiniti both came out with new convertibles that are selling well, Drory said. General Motors released the Cadillac SRX, a crossover SUV that has taken off, said Alan Rice, general manager of Colonial Cadillac in Norfolk. It contributed to a 60 percent boost in sales at that dealership, as reported by AutoCount.

"We're having trouble keeping the stock we would like, which is a good problem to have," Rice said of the SRX.

Not all local dealerships saw sales rise in the first half of the year. Most of those that didn't were selling brands that manufacturers sold or discontinued, such as Pontiac and Saturn. Others have closed showrooms or stopped receiving new vehicles to sell since GM and Chrysler started downsizing their dealership networks.

Dealers pointed out that sales plummeted so deeply along with economic doldrums early in 2009 that they had nowhere to go but up. The recent increases still leave monthly numbers far below the highs of 2007, Klimkiewicz and Rice said.

Still, the signs are positive, the dealers said.

"We're hoping that things are moving in the right direction," Drory said, adding that he expects to tally "modest growth" through the rest of the year. "I don't see us going backwards, no."

Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com