Many auto dealers ready to sell

Consumers may find themselves in the catbird seat when it comes to bargaining for a new vehicle these days.

Many auto dealerships are sitting on large inventories right now, and they're hungry for sales.

"I think it's fair to call it a buyer's market right now, given the amount of product that's out there," said Pete Stone, manager of Duluth Dodge/Suzuki/Mitsubishi. "Buyers have so much to choose from and everyone's vying for sales."

Dave Ling, general manager of Miller Hill Chrysler-Jeep-Mazda-Subaru, concurred, saying that dealers are eager to move vehicles, even at thin margins, rather than continue to pay floor-plan financing on stagnant stock.

"It's definitely a good time to be a buyer," he said.

In the face of rising fuel prices this year, drivers' appetite for sports utility vehicles and trucks has waned, leaving manymanufacturers with large stores of unsold vehicles.

During the first 10 months of 2006, about 511,000 fewer new light trucks and SUVs were sold nationwide than during the same period last year -- a decline of 6.5 percent -- according to Autodata Corp., a Woodcliff Lake, N.J.-based company that tracks the auto industry,.

Meanwhile, car sales are running slightly ahead of last year's pace, with about 6.6 million vehicles sold through October of this year -- 1.4 percent more than last year, according to Autodata.

Although trucks and SUVs have proven less popular in 2006, Autodata reports they still accounted for 53 percent of overall U.S. vehicle sales during the first 10 months of this year.

"A lot of full-sized trucks and SUVs have been traded in on smaller SUVs and passenger cars this year. No question," said Scott Krenzen, co-owner of Krenzen Cadillac-Pontiac-Honda-Nissan-Lincoln-Mercury in Duluth.

Peter Kolar, co-owner of Kolar Auto World, said he expects 2006 to go down as a record year for sales at his Duluth dealership. He primarily credits the growing popularity of the Toyota and Scion product lines for his sales gains. Kolar also carries GMC, Buick and Chevrolet, but he said sales of many vehicles in these lines have languished.

"All three domestic manufacturers are having a hard time here, just like they are across the country," Kolar said.

While "the Big Three" -- General Motors, Ford and Daimler-Chrysler -- have been serving up deals of late, Kolar observed, "incentives don't seem to be motivating customers like they used to."

In light of the vehicle glut some manufacturers now face, Stone expects aggressive deals will be the order of the day.

"It's going to take incentives and intense marketing campaigns to drive dealer sales," he said, adding that his own dealership is "holding its own" and had an encouraging October.

Linge credits Miller Hill Chrysler-Jeep-Mazda-Subaru's diversified product line for keeping the dealership healthy. For the year, he says his total new-vehicle sales are up slightly, but used-car sales are down about 8 to 9 percent. He said good deals have led some people who would traditionally buy used to instead buy new vehicles.

Krenzen expects America's domestic automakers to regroup and adjust production to changing market conditions.

"They'll probably have to shrink before they can regrow their business," he said.

Stone said domestic manufacturers have made "a quantum leap" in terms of product quality but are still suffering from the misperception that their vehicles are inferior to those sold under foreign labels.

"It's going to take a while to get some of that stigma to go away," he said.

Linge, too, predicts a rebound for the Big Three.

"Everything runs in cycles, and everything has its day," he said. "At the end of the day GM, Ford and Chrysler will all be there."

PETER PASSI covers business and development. He can be reached weekdays at (218) 279-5526 or by e-mail at ppassi@duluthnews.com .