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Area Auto Dealers Optimistic About Year Ahead

By
Rob Pion
Autos Special Coverage

Drive Time

Rob Pion

Rob Pion says the customer experience has become more important in a competitive marketplace for dealers.

 

 

 

Auto dealers have seen it all over the past few years, from soaring costs for vehicles, parts, and labor to inventory shortages to a rapid rise in interest rates.

But they’ve adjusted and adapted, they say — and so have consumers.

“We’re still doing all right. There still seems to be plenty of traffic and activity out there,” said Rob Pion, general manager of Bob Pion Buick GMC in Chicopee. “I would say there was a period last year where people really started to get rate-conscious, but that has passed to some extent. We’ve seen rates start to come down as well as people just kind of accepting it. I mean, it’s not our rate; the Fed sets the rate.”

Despite those concerns, Pion added, “2023 was a great year for us. GMC’s got a couple new products and redesigns coming out, and Buick’s got a number of redesigns coming out. We’re going to have almost a completely new set of models by this time next year. So there’s a lot happening. The used-car market has somewhat stabilized, too, and think that’s going to continue to stabilize throughout ’24. But right now, the public still seems to be out there buying and looking for vehicles.”

Especially on the new-car side, “everything’s kind of back to where things were,” said Mike Filomeno, general manager of Marcotte Ford. “The inventories are really good; products are coming in quickly. Prices are still up there, though, based on supply and demand.”

Manufacturers recognize the dual crunch of rising costs and rising interest rates, however, said Mike Marcotte, president of the dealership. “When interest rates rose last year, Ford started putting programs on the new vehicles again, like the 1.9% or lower interest rates that help with the financial changes going on. The market is definitely starting to react to that.”

Pion has seen similar moves. “Throughout the year — and it’s still continuing — GM has had some aggressive financing rates out there. We’re not seeing the big rebates of years past, but depending on credit approvals, we’ve seen 3.9%, 2.9%, they even went down to 0.9% for a little bit for 36 months. So there has been some help from the factory on that side of things. Not the big cash rebates that we saw in years past, but certainly interest-rate relief.”

Carla Cosenzi, president of TommyCar Auto Group, said business has been strong, and she’s seeing positive trends across her family of six dealerships.

“We’re not seeing the big rebates of years past, but depending on credit approvals, we’ve seen 3.9%, 2.9%, they even went down to 0.9% for a little bit for 36 months.”

“Despite inflation affecting costs of parts and services, consumers understand the situation,” she told BusinessWest. “Manufacturers are offering more aggressive lease incentives, which our customers are taking advantage of, leading to increased business. Certain manufacturers like Volkswagen, Nissan, and Hyundai are also offering 0% financing to consumers.”

That’s in addition to TommyCar’s internal loyalty program, which allows customers to earn up to 15% back on every dollar spent in the service department, which can be used toward their next vehicle purchase.

Meanwhile, “our inventory levels for both new and used vehicles are returning to normal,” Cosenzi noted. “We’ve seen an increase in our used inventory levels, primarily due to steady trade-ins and our aggressive buy-back offers, which have helped us maintain a steady supply of used cars. We’re optimistic about the year ahead.”

 

Back in Stock

Marcotte said his dealership, like many others, dipped to around half of normal inventory in the wake of the pandemic. “But now we’re back to good levels. I’m so glad we can offer gas, diesel, hybrid, and now electric vehicles, which are 8% of the market right now. We’re in every segment.”

Used-car inventories were one of the biggest stories in auto sales across the U.S. over the past few years, as shortages led to soaring values. That situation has stabilized (not necessarily to car owners’ benefit; see story on page 22), but dealers are breathing easier when it comes to what they can put on their lots.

“We’re a big Ford certified pre-owned dealership,” Filomeno said, “and there’s still demand for a good used car out there. A lot of people have been holding on to their cars for the last five years and repairing them because there wasn’t a vehicle for them to buy, so now they’re trying to trade those vehicles in.”

Marcotte Ford’s mobile service vans

Marcotte Ford’s mobile service vans have been a popular customer perk.

Pion agreed, noting that inventory has rebounded, for both new and used vehicles, and across the spectrum, from cars to SUVs to trucks.

“Some of the specialty trucks, especially the heavy-duty trucks, things of that nature, are still difficult to get. It could be anywhere from 12 weeks to 8 months to get it. But people have also become a little more accustomed to that today, too. They don’t expect things tomorrow. They kind of know what it’s like, so they’re willing to wait a little longer.

“Specific trucks are still hard to get,” he went on. “If you come in here and you want a black one with a black interior with the 22-inch wheels with this type of engine … that could still be a hard truck to get. If you came in here and said, ‘hey, Rob, I want a pickup truck. I don’t need to have a big engine, I’m going to use it mostly for my family, some landscaping on the weekends, just around the house’ … I have that. So that purchaser who isn’t incredibly specific about their needs can walk in and be serviced pretty quickly. But that business owner that only wants the white truck for their company? That can be tough.”

The used-car market has continued to favor sellers, Pion added, “and I think it’s created a desire in some people to keep their vehicles longer. In the service department, we definitely see larger repair bills than we have in the past because people are keeping their vehicles longer.”

Another big shift in auto sales continues to be the proliferation of electric vehicles (EVs), a trend that TommyCar has embraced.

“We’ve been a strong electric-vehicle dealer and continue to be one of the top electric-vehicle dealers,” Cosenzi said. “Electric vehicles are more affordable than ever, thanks to federal and state rebates, along with manufacturer incentives.”

While some new EVs, like the Volvo EX90 and EX30 models, require pre-orders due to their popularity and limited availability, others can easily be found on lots, including the Volkswagen ID.4, Hyundai Ioniq 5 and 6, and Nissan Ariya.

“Once people are in the EVs, they’re going to buy another EV. I love the EV. That’s my next purchase.”

Marcotte Ford boasts three EVs — the Mach-E, the F-150 Lightning, and the E-Transit — and “they’re bringing a different shopper than we normally see, with different trade-ins. So it’s bringing a new face, a new customer, into the dealership,” Marcotte said. This evolution is also why the dealership installed four high-speed EV chargers on its lot last year.

“We see people from all over New England coming through here on the weekends. They’ll charge up before going skiing,” he said. “Our employees, if they buy, can charge right here. Customers can come here to charge.”

Marcotte said EV adoption is still increasing, but not as quickly as before, and Ford has changed its production level based on that trend, but the company still envisions a strong future for electrics.

Carla Cosenzi

Carla Cosenzi says interest-rate incentives, the return of healthy inventory levels, and solid options in electric vehicles have all boosted sales.

“Once people are in the EVs, they’re going to buy another EV. I love the EV. That’s my next purchase,” he told BusinessWest, noting that some drivers are more comfortable driving hybrid vehicles first, and many of those will eventually move to all-electric as well. “So it’s good we can offer every option to customers.”

Many drivers, he added, are waiting to feel more confident about charging stations becoming more widespread. “So once there’s more infrastructure, I think that anxiety will go away a little bit.”

Whether they’re buying electric, hybrid, or traditional vehicles, today’s drivers tend to be interested in certain bells and whistles, Cosenzi said.

“Customers are seeking vehicles with advanced high-tech features such as adaptive cruise control, lane-keeping assist, automatic emergency braking, large touchscreens, smartphone integration, and voice recognition,” she noted. “These trends reflect a desire for practical, safe, convenient, and sustainable vehicles with the latest technology.”

 

Out and About

Still, at the end of the day, customers still appreciate a positive experience when purchasing a vehicle, Pion said.

“These brands mean everything to us,” he said, noting that he’s now the only Buick dealership within an hour’s drive. “I just hope that we can offer an experience where people want to be here and be a part of the family. That’s how we try to treat everybody and differentiate ourselves. I try to meet and talk to as many of my customers throughout the day as I can because it’s important to me.”

Marcotte agreed the customer experience is critical. One intriguing development at his dealership has been the introduction of five mobile service vehicles that will drive to a home or business and service a car on the spot.

“It’s bringing the convenience to the customer, and we know time is so valuable, and want to get them up and running,” Marcotte said, noting that the program has been a positive for Ford. “It’s a whole brand differentiator, and not all manufacturers are up on this. So we keep focusing on the guest experience, giving them every option, and now you can be at your home while we do the oil change, or keep your business up and running. We’ve had really great feedback from the customers.”

Auto Dealers Gain Some Momentum, but Challenges Persist

By
Mike Marcotte shows off one of the Bronco Sport models
Autos Special Coverage

Driving Forces

Mike Marcotte shows off one of the Bronco Sport models

Mike Marcotte shows off one of the Bronco Sport models on the Marcotte lot, one of the small SUVs that are seeing a surge in popularity.

 

Prior to the pandemic, Mike Marcotte recalls, there would be between 300 and 350 new cars on the lot at Marcotte Ford, the Holyoke mainstay started by his grandfather more than a half-century ago.

At the height of COVID, when there were supply-chain issues and a massive microchip shortage, there were maybe 30 or 40 cars on that same lot.

“Employees could park wherever they wanted at that time,” Marcotte, the company’s president, said with a laugh, noting that today, there are close to 200 cars on the lot on Main Street, partly out of necessity — there are still fewer cars available from the manufacturer — but also out of choice.

“You don’t need to have everything on the lot because you can factory-order vehicles,” he explained. “It’s nice to have all the options, but you have carrying costs, and you want the freshest product.”

This commitment to keeping smaller inventory levels has provided the business with another opportunity to expand what has become a complex of sorts on Main Street, one that includes everything from the dealership to a commercial truck center to a car wash. Indeed, Marcotte showed BusinessWest a row in the parking lot that is now the site of a construction project — one that will create a bank of charging stations to handle the growing volume of electric-car sales.

“You don’t need to have everything on the lot because you can factory-order vehicles.”

Rising electric and hybrid car sales and smaller inventories, by choice, are among the trends and ongoing developments in an auto-sales industry that is still in many ways adjusting to life post-COVID. It’s a time of challenge — higher interest rates, talk of recession, and some lingering availability issues when it comes to many makes and models, for example — but also opportunity, in the form of new and intriguing products (mostly those electric models), some improved incentives from the manufacturers, and some lingering, pent-up demand.

Other trends include a still-challenging used-car market — meaning challenging for dealers who struggle to find cars and challenging for consumers, who continue to face limited options and high prices — as well as steadily rising SUV sales and a growing willingness among consumers to order a vehicle rather than pick one off the lot.

Carla Cosenzi, president of the Tommy Car Auto Group, which includes Hyundai, Genesis, Nissan, Volkswagen, and Volvo dealerships, said she and her team, like most in this business, entered the year with conservative expectations, because of those challenges listed above, and two quarters into 2023, they are meeting them.

“It’s been such a volatile market, with inventory constraints, interest rates, and what’s happening with the economy, so we just made a conservative projection and figured we could always adjust if we needed to,” Cosenzi said. “We projected to increase sales over last year, which we always do, but not by a lot.”

Ben Sullivan, chief operating officer at Balise Motor Sales, concurred. He told BusinessWest that, after three years of decline, to one degree or another, and a 2022 that was essentially flat, 2023 was seen within the industry as a year when, despite higher interest rates and inflation, dealers would do some catching up.

Ben Sullivan, seen here with a Kia Sportage plug-in hybrid

Ben Sullivan, seen here with a Kia Sportage plug-in hybrid, said electric cars and plug-ins comprise a growing percentage of sales at the company’s many dealerships.

And they have, he said, although limited supplies have impacted the degree that they can do so, with some brands impacted more than others. He noted that, while there are still some supply-chain issues, the bigger challenge now is getting the cars to the lots.

“There’s still some fragility in the supply chain,” Sullivan said. “On top of chips and COVID lockdowns, which, for most part, have passed in the global supply chain, now what you’re dealing with are labor shortages at ports and shortages of rail cars — there’s a particular type of rail car that carries vehicles. And on top of that, at the end of this year, the domestic manufacturers will be renegotiating their AUW contracts.”

For this issue and its focus on auto sales, BusinessWest talked with several dealers about what’s happening with this market at the halfway point in the year, and what we can expect in quarters three and four — and beyond.

 

To a Higher Gear

Before addressing 2023, Sullivan first set the tone by recapping 2022, which was, by most measures, and especially the new-car-sales yardstick, a down, or flat, year. And the availability of cars, or the lack thereof, was the biggest factor.

“Every time we thought that someone was going to build enough cars to grow sales, they weren’t able to, or they weren’t able to ship them,” he explained, listing issues ranging from plant lockdowns due to COVID to a computer-chip shortage and backups at the ports. “So the industry was really under some pressure.”

“People like to feel and touch and experience what they’re going to be driving, so there’s definitely an opportunity to lose market when you don’t have the right inventory and your competitor does.”

The consensus within this sector was that things would rebound somewhat in 2023, but the bounce would be limited by everything from lingering shipping challenges to higher interest rates to inflation limiting consumers’ buying power.

And all that has come to pass, said those we spoke with, noting that one of the biggest issues still facing dealers is inventory. Indeed, while most all of them would carry fewer vehicles than they did before the pandemic, for those reasons mentioned above, they would prefer more than they have at present — at least with most models.

Cosenzi, like Sullivan, said inventory levels vary with the brand, with some manufacturers faring better at bringing cars to the lot than others.

“Hyundai has inventory, and inventory is becoming more available every month,” she said. “Meanwhile, Volkswagen’s inventory isn’t nearly as robust as Hyundai’s, and with Nissan, we’re slowly seeing it grow, but it’s not faring as well as Hyundai.

“Obviously, we’ve learned to be more disciplined through COVID and not having as much inventory, and I think that has trained the consumer to some respect,” she went on. “However, people like to feel and touch and experience what they’re going to be driving, so there’s definitely an opportunity to lose market when you don’t have the right inventory and your competitor does.”

Carla Cozensi

Carla Cozensi says inventory issues are among the many challenges facing dealers today.

Sullivan said inventories are generally improving across the spectrum of brands in the Balise stable, which now includes a second Subaru store (the other is in Rhode Island), with the quiet acquisition of the Steve Lewis dealership on Route 9 in Hadley early this spring. Overall, 60% of cars are now pre-sold, or factory-ordered, compared with 80% to 90% at the height of COVID.

Overall, he said, there is now more of a willingness on the part of consumers to factory-order vehicles and get exactly what they want — and wait several weeks for it — while rising inventory levels improve the odds of getting exactly what they want (or at least close) and driving it off the lot the same day.

Marcotte said levels of inventory are rising at his Ford store, but a good number of vehicles — maybe 33% of all sales, by his estimate — are still factory-ordered, with wait times of roughly six to 12 weeks, compared with four to six months at the height of COVID.

“It’s back to normal in many respects, but you’re still dealing with some supply issues; it may not be microchips, but other parts — one widget can hold up a whole vehicle,” he said, adding that it can still be challenging to secure adequate inventories of some product, especially, in his case, trucks and cargo vans.

 

Current Events

But while challenges persist, those we spoke with have seen several encouraging trends and developments.

At the top of that list is electric vehicles and hybrids, sales of which have been climbing steadily, if unspectacularly, over the past several years.

Within the Balise stable, Sullivan said, there are now 15 electric models, with more on the way, when a few years ago, there were just three.

“It’s back to normal in many respects, but you’re still dealing with some supply issues; it may not be microchips, but other parts — one widget can hold up a whole vehicle.”

“Soon, there are going to be 54 entries into just the electric-vehicle market,” he said. “And it’s going to be a very interesting landscape to watch as people decide, ‘can I go all the way in electric, and which one do I get, based on range and price and tax credits?’

“It is certainly a growing part of the business, but what’s interesting to watch as well is the number of people who go out with an electric and decide they’ll take one step away from that and go plug-in hybrid,” he went on. “We’re seeing a real demand push going on for plug-in hydrids; the hybrids have been around for a while, but the plug-in hybrid is really starting to come into its own. We’re seeing a huge increase in demand for those vehicles.”

Meanwhile, sales of SUVs, especially the smaller, crossover models, continue to dominate the market.

Some makers have all but stopped selling sedans — Ford has only the Mustang left in its portfolio, for example — amid growing popularity of SUVs, which appeal to consumers of all ages.

Cosenzi said sales of models such as the Hyundai Tuscon, Nissan Rogue, Volkswagen Tiguan, and Volvo XT60 continue to trend higher. There is still a market for sedans, she went on, noting that VW’s Jetta and Hyundai’s Elantra, both smaller models with comparatively smaller price tags, are still a strong seller. But that market is smaller and continuing to trend in that direction.

Marcotte concurred, pointing to soaring demand for the Ford Bronco and Bronco Sport, a smaller SUV that is capturing an audience.

“We’re getting a lot of new buyers because of the style of the Bronco Sport — we’ve had some Escape customers, people who have bought two or three Escapes, moving to the Bronco Sport,” he said, adding that another popular addition to the portfolio is the Maverick, a small truck that gets 40 miles to the gallon and lists for under $30,000.

As for the used-car market, 2023 has looked a whole lot like … well, 2022, said those we spoke with, much to the chagrin of consumers and dealers alike.

The problem, now and then, is inventory, or lack thereof, said Cosenzi, adding that supplies remain low, for many reasons. These include fewer new-car sales (compared to pre-pandemic levels) and, therefore, fewer trade-ins, as well as the fact that seemingly all constituencies, from consumers to car-rental companies, are hanging onto their cars longer.

That means there are fewer pre-owned cars on the lots, which equates to higher prices, a simple byproduct of the laws of supply and demand that is not likely to change any time soon, Sullivan said.

Cosenzi agreed, noting that dealers can’t get as many cars, and they have to work much harder to secure what they can.

“We’ve done a really good job sourcing them from our own customers, like marketing to people in our market that we’re interested in buying their car, and that’s how we’ve been able to maintain our levels,” she said. “But it’s been difficult. It’s been more work than it’s been in the past, that’s for sure.”

 

The Road Ahead

Summing up the mindset at Balise, Sullivan said the company is “bullish,” and in a growth mode.

And, increasingly, it is securing the fuel it needs for such growth — fuel in the form of inventory, demand for products (especially the new electric vehicles and SUVs now dominating the lots), and economic conditions that will prompt consumers to buy.

Time will tell what happens over the final two quarters of this year, but it seems likely that dealers will do more of that catching up that was projected for 2023.

 

From EVs to Inventory, Auto Dealers Roll with the Changes

By
Autos Special Coverage

Leading the Charge

The dates seem … well, close.

Volkswagen wants all its cars to be electric by 2035. Nissan has set a 2030 goal. Volvo? 2025.

“So there’s a strong commitment from different manufacturers to become all electric. And you’re starting to see new models introducing more hybrid electric models across the entire lineup,” said Carla Cosenzi, president of TommyCar Auto Group.

That may seem like a reasonable goal locally, she added, but manufacturers aren’t just building cars for Western Mass.

“We’re in a much different market than a lot of others. In our market, there’s a ton of electric infrastructure and high demand for electric vehicles, but I’m not sure what that looks like in other parts of the state or the country. And I think the infrastructure has to be there to make it realistic.”

Gary Rome, who owns a Hyundai dealership in Holyoke and a Kia dealership in Enfield, said he was the first dealer in the U.S. to deliver an electric vehicle from Hyundai, and his electric vehicle (EV) sales are up 38% over last year.

“There’s are state and federal rebates on these vehicles, which make them more attractive,” he explained. “You’ll pay more for an electric vehicle, but if you drive a lot, an electric vehicle pays for itself in short order. The metric is $1.25 per gallon to pay for electricity, versus $4 a gallon. We’ve had people trade in their gas-guzzling pickup truck, and they’re saving hundreds a month in fuel alone.”

About 15% of Rome’s sales are electric vehicles, which he estimated is about three times the national average, with the hottest model being the Hyundai Ioniq 5, which MotorTrend named the 2023 SUV of the year, among other accolades.

“We’re seeing a trend of manufacturers focusing more on electric vehicles than ‘ICE cars’ — internally combusted engines,” he told BusinessWest, though there’s still some hesitancy among motorists to try one. To that end, Gary Rome Hyundai is one of five dealers in the country offering a subsciption program, allowing customers to rent an electric vehicle for 28 days, including insurance, to see if it fits their lifestyle.

Rob Pion

Rob Pion says the industry’s inventory issues eased in 2022, but it was sometimes challenging to have the right inventory in stock.

“The adoption of electric vehicles is all about educating the client, and a lot of folks have range anxiety; they’re afraid of running out of charge,” he explained. “But you wouldn’t leave the house with an empty tank of gas without thinking, ‘where am I going to get my gas?’

“The range in our vehicles is quite extensive, about 308 miles. That’s plenty of driving time if you have a charger, and most utilities have a $500 or $1,000 rebate that will allow you to offset the cost of putting a charger in your garage. You plug it in, and the car is charged in four hours.”

In addition, EV drivers become familiar with other charging stations; Rome offers six at the Holyoke store, including two ‘superchargers’ that can fill a battery to 80% within 18 minutes.

Bob Pion Buick GMC is getting into the EV game as well, said General Manager Rob Pion, noting that GMC will be introducing an electric Hummer pickup and Hummer SUV by the second quarter of 2023, and an electric Sierra Denali pickup by 2024, while Buick is planning to go all-electric in the near future.

“That’s definitely coming,” he noted. “Electric is hitting our store. We haven’t had any experience with it up to now. In the next three years, we’re going to have a plethora of electric vehicles on the lot here to offer customers.”

Some customers are excited about the electric options, but others have reservations — for instance, what if the electric grid is strained, as it has been in some areas of the country, where people were told not to turn their AC on during certain hours?

“So now I’ve got an electric car charging at the house, taking as much power as that,” Pion said. “I’m looking at electric as a great option, but I share those concerns — is the infrastructure there?

Gary Rome

Gary Rome says customers will become more comfortable with electric cars as they deal with their “range anxiety.”

“But I do think it’s an exciting time, and there’s a future in it, even if it might not be right for everybody,” he added. “It’s definitely a conversation that goes on every day with customers.”

 

Rolling In, Rolling Out

Electric vehicles aren’t the only trend shaking the auto-sales industry lately. Through the latter half of the pandemic, inventory was a major problem as buyers swarmed onto lots much faster than manufacturers ramped up production after 2020’s dramatic slowdown. That problem is easing, to an extent.

“It’s a strange time in the auto industry,” Cosenzi said. “It’s so hard to predict right now, with so many different moving pieces constantly. We have been really fortunate; we have managed to keep a steady supply of inventory, so actually, it’s been a very good year for us. All our brands are doing really well.”

TommyCar’s used inventory has been healthy as well, she said, particularly the certified used inventory that comes with a warranty of three years or 100,000 miles. Because the company relies on market pricing at a time when used vehicles are in demand, both trade-in figures and sales prices are up.

“Business has been better than the past five years,” Cosenzi said, adding that low-but-rising interest rates have been a driver. “A lot of people who wouldn’t have been shopping for a new vehicle have upgraded to new vehicles.”

Pion noted that 2022 wasn’t quite as profitable as 2021, but with a month of business left in the year, sales have been healthy.

The inventory situation has definitely improved, he said, but getting the ideal mix of inventory can be an issue. “There’s more inventory than there was, but the challenge is getting the right inventory — you might have a half-dozen Buicks on the ground that are front-wheel drive, not the all-wheel drive customers might be looking for,” he explained.

“A customer can go online and find the exact car they want, and they can get their payment and interest rates right online. It really helps the customer to gauge what they’re looking for when they come into the dealership. It also helps us, as the dealer, make the best use of the customer’s time. The process becomes very efficient.”

“And this is another year end where the heavy-duty pickups are very, very difficult to come by. A lot of companies are looking for that end-of-year write-off for heavy-duty trucks, but they’re up against it this year. Even though there’s inventory, the inventory out there is a little bit of a hodgepodge, and not always what customers would want. I don’t know that I see that getting better anytime soon.”

Which is challenging at a time when customers often walk into dealerships knowing exactly what they want, with little flexibility, thanks to the information available on the internet.

“We’re very far from the time when a customer walked in the door looking for a $35,000 vehicle, asking, ‘what do you have?’ Instead, they come in and say they’re looking at a 2020 Buick Envision, pre-owned, stock number X, asking to pay Y.”

Cosenzi agreed. “Look how much technology has changed the automobile business — a customer can go online and find the exact car they want, and they can get their payment and interest rates right online. It really helps the customer to gauge what they’re looking for when they come into the dealership. It also helps us, as the dealer, make the best use of the customer’s time. The process becomes very efficient.”

Meanwhile, the used-car market has come down a bit from the low-inventory, high-price times of late 2020 into 2021, Pion said. Not that the values are that much lower.

“If you bought a heavy-duty pickup truck within the last couple of years, you’re able to return that truck today and get almost what you paid for it — if you can find a new one, because there’s such a shortage there,” he noted, adding that used-car inventory has also been affected by rental companies that sold off some of their fleets during the pandemic’s peak and then bought up huge numbers of cars afterward.

Carla Cosenzi

While it’s not easy to predict what the coming year will bring, Carla Cosenzi says, her dealerships posted strong sales in 2022.

“There’s still a lack of used inventory out there, and what is out there is worth more than had the market stayed status quo from three years ago,” he went on. “I would love to say there’s light at the end of the tunnel. We have inventory, don’t I think we are there yet. For the average person, it might not matter. But some businesses are really hurting, not getting the vehicles they need to actually do their jobs.”

Rome said the inventory issue is definitely easing. “We’ve done a very good job the past couple of years pre-selling our inventory, so they sell extremely quickly, and because we sell so many, we get more, and we’ve been selling them all over the country,” he said, citing states as far south as Florida and as far west as Colorado. “Folks have purchased their new cars from us; they either come here to pick them up, or we’ll deliver to them.”

 

Final Plug

All this considered, Rome said the outlook for 2023 is bright. “I think the manufacturers have had a vacation from having to spend money on incentives and rebates, and I think they’ll realize, as inventory accumulates and cars are more available, they need to add an appropriate amount of incentives to all the cars and offset any clients’ concerns about huge interest rates; they may offer a lower rate and rebate.”

His sales figures back up his general optimism, as Gary Rome Hyundai ranks fifth in the region from Maine to Virginia, comprising 169 dealers. “We’re definitely selling cars like crazy.”

Looking ahead, and judging by the plans of manufacturers, more and more of those cars are going to be electric.

“It’s a huge commitment. They’re not looking back — it’s full steam ahead by Hyundai,” Rome said. “They just broke ground outside Savannah, Georgia on $5.4 billion electric vehicle battery plant; it’s going to be employing 8,100 workers.”

He doesn’t worry too much about the public’s adoption of EVs, especially in Western Mass., where there’s a strong level of environmental consciousness and a good number of people who have already driven hybrid and all-electric vehicles.

“There’s already a market for the car out there, from people who are into reducing carbon footprint,” he said. “We’ve had people come from the Leverett area and the Berkshires, who already have solar in their house, a battery-operated lawnmower, a battery-operated bicycle — a lot of people are already in the fold.”

Cosenzi isn’t sure if Americans in general are ready to go fully electric, but she wouldn’t be surprised if more people start to move that way, whether driven by emissions concerns, long-term cost savings, or other reasons.

“If somebody is not ready to make full jump right away, they have the option of a plug-in hybrid,” she said. “I have a plug-in right now — it’s not 100% electric, but I love it.”

 

Joseph Bednar can be reached at [email protected]

For Auto Dealers, Things Are Improving, but ‘Normal’ Is Down the Road

By
Gary Rome, seen here with ‘Daisy,’ one of his mascots
Special Coverage Sports & Leisure

Coping with the Conditions

Gary Rome, seen here with ‘Daisy,’ one of his mascots

Gary Rome, seen here with ‘Daisy,’ one of his mascots, says cars are moving off the lot as fast as they come in, with most sold long before they arrive.

For the area’s auto dealers, this will be a year, and a December, unlike most and certainly not anything approaching normal. Lots are barren, and showrooms often have used cars under the bright lights. Dealers are coping as best they can, and so are customers, and while current conditions are expected to continue into next year, there seems to be some light at the end of the tunnel.

 

On one wall in his office at the Hyundai dealership that bears his name, Gary Rome has a large screen that displays images captured by more than two dozen security cameras.

As he talked about the current conditions facing dealers like himself, he gestured toward pictures on that screen of one of the back lots at the massive store on Whiting Farms Road in Holyoke — a barren lot with no cars parked on it.

“Normally … that would be full — four lanes, full,” he said, noting that ‘normal’ was quite some time ago. Now, instead of normal, there is only reality, in the form of inventory shortages that have, as Rome noted, prompted dealers to put used cars in the showrooms, position cars so it looks like there is more inventory than there actually is, and even have employees park in front to provide that same effect.

He’s only taking the first of those steps, and that’s out of necessity, he said with a voice that hints at frustration, which is certainly understandable, but mostly acceptance of a situation that is far beyond dealers’ control and something they will have to live with for at least several more quarters.

“We’re just coming through the second year of the most unprecedented time that the industry has ever faced — and the forecasts for what was going to happen to this industry were far more dire.”

The frustration comes from the knowledge that these dealers could certainly sell a lot more cars if they had them, especially given the pent-up demand and the fact that many consumers have money to spend and are eager to spend it. And also the numbers — most dealers are looking at overall sales volume being down between 20% and 30% from what would be considered a ‘normal’ year. The acceptance part comes from the knowledge that consumers have responded to the situation mostly with patience and understanding, and, overall, dealers are making the best of a bad situation that could actually be worse. Much worse.

“We’re just coming through the second year of the most unprecedented time that the industry has ever faced — and the forecasts for what was going to happen to this industry were far more dire,” said Ben Sullivan, chief operating officer at Balise Motor Sales. “And we’ve actually fared pretty well, and the customers have been accommodating because they can understand; they see the news. Somehow, we’re making it through, and a lot of customers have no issues with doing it this way.”

By ‘this way,’ he meant that, instead of driving onto a lot and choosing from among the dozens of options of the model they want, they’re either ordering what they want and waiting for it arrive in a few weeks (or a few months, as the case may be) or buying something they know is on a truck and on its way — even if it might not be exactly what they want.

Carla Cosenzi, president of TommyCar Auto Group, agreed, noting that her family of dealerships has an appropriately named program that speaks to all this, called Reserve Your Ride.

“People can pick out their vehicle and order it or pick a car out of pipeline,” she said, adding that, while there may be fewer cars to actually choose from on the lots, people can still buy cars, and they are.

Ben Sullivan says there has been some improvement on the inventory front

Ben Sullivan says there has been some improvement on the inventory front, but it might be two more years before dealers see something close to pre-pandemic levels.

Sometimes, because of the inventory issues, it may not be a new car, she went on, adding that, in this environment, some are waiting patiently for the new cars to roll in, while others are opting for used cars, and still others, those with leases that are expiring, are opting to buy those vehicles.

And this is how it will be for the foreseeable future, said those we spoke with, all of whom noted that COVID-19 and its many impacts have made the future — even the immediate future — hard to predict.

As for the present, it’s December, a month that is generally a good one for dealers, and for many reasons, ranging from holiday-gift purchases (especially luxury models) to businesses buying new vehicles before year’s end for tax purposes.

“This is a time of year when people want something new — new cell phones, a new car, a new used car, a new espresso machine,” said Sullivan, adding that this desire for new coincides with a mostly healthy economy, lower unemployment rates, and, overall, higher levels of confidence. “And when people feel confident, they wind up making large purchases because they are not afraid.”

They may not be afraid, but there will certainly be fewer cars to buy, and that means this will be different kind of December, but one that still holds promise for dealers — and customers — waiting for the picture to improve.

 

Dropping Down a Gear

To the untrained eye, Sullivan said, it doesn’t look like much is happening at area dealerships.

Indeed, what most people see in that minute they drive by a store is lots of acreage not being occupied by new or used cars. Indeed, the vacant parking lots have become one of the enduring images of the supply-chain crisis at this stage of the pandemic.

But a closer look would reveal plenty of activity, just not the type that would be considered normal, he said.

“If you put a stop-motion camera at any dealership, you’d see 18-wheelers coming in, you’d see cars coming off of it, you’d see them going through their pre-delivery inspections and service and the salesperson calling the customer to say his vehicle has arrived, and that person picking it up the next day,” he noted. “That’s about how fast this stuff is going right now.”

Carla Cosenzi says dealers and customers alike are adjusting

Carla Cosenzi says dealers and customers alike are adjusting to a landscape that is without precedent in the auto industry.

Other dealers we spoke with echoed those remarks, saying the days of large inventories have been replaced by that new way of doing business described earlier, with the vast majority of cars sold before they reach the lot (70% to 80%, by most estimates) or within days of rolling off the truck.

This new world order is on clear display on a huge board in one of the offices at Gary Rome Hyundai, one that tracks which vehicles have been sold, by whom, and when they will arrive on the lot for the customer to pick up.

“We’re just coming through the second year of the most unprecedented time that the industry has ever faced — and the forecasts for what was going to happen to this industry were far more dire.”

It’s a different landscape, to be sure, said Rome, adding that there would normally be more than 500 cars on the Hyundai lots; currently there are roughly 140, about one-quarter of that total, with only 20 of them being new cars.

It’s the same at the TommyCar dealerships, said Cosenzi, noting that the Hyundai/Genesis dealership in Northampton would normally have 200 new models on the ground. After a shipment arrived the day before she talked with BusinessWest, there were 30 to 35. At the Volkswagen store, also in Northampton, there would usually be 80 new cars. Now, 20 is the norm.

These numbers prompt frustration because they collide with other kinds of numbers, especially the ones pertaining to unemployment, consumer spending, and consumer confidence levels, said Rome, noting, as others did, that pent-up demand remains high for all types of vehicles, but especially new models.

“Our clients, in general, have more money than they had two years ago, they have more savings, they have more equity in their homes,” he explained. “And they also feel like they want to do something good for themselves. They’ve been locked down for the past 20 months, and they’ve been looking at the same car all that time. They want to do something nice for themselves.”

Such dramatic reductions in inventory also make for obvious changes and adjustments, including those that need to be made for the holidays, said Cosenzi, noting that many of those desiring to put a new car in the driveway on Christmas morning understood that, to make that happen, they needed to place their order in November. And they might also have had to settle for their second choice when it came to color.

Meanwhile, more consumers are looking toward used cars, which are in greater abundance but still not in the pre-pandemic numbers, she said, and also at keeping a car that is coming off lease instead of trading it in for a new one.

“And a lot of those buy-out values are under current market values,” she said. “It’s a good deal for the customer.”

While things certainly aren’t normal, in some respects, the picture is actually starting to improve, said Sullivan, noting that arrivals are expected to pick up in December and be ahead of October and November levels and well ahead of months earlier this year, when supply-chain woes peaked.

“There’s cars coming in, and there’s cars going out,” he said, adding that his general managers — and there are nearly 20 of them — have reported as a group that the company should expect a solid December.

Meanwhile, looking down the road, or trying to, anyway, dealers said it is difficult to say when ‘normal’ — as in lots full of cars for people to choose from — will return, or even if they will return.

“I don’t think we’ll see it in 2022,” said Sullivan. “I think it will be 2023 before you drive by a dealership and see a stock full of cars. It’s not until the third quarter of 2022 where you’ll see maybe 65% of what you’d normally see for ground stock.”

Cosenzi concurred, but noted that projections vary with the brand, with some manufacturers responding to the worldwide microchip shortage and supply-chain crisis better than others.

“We’re anticipating that things will get better over the next few months, but it will take a long time for us to recuperate and get back to the inventory levels that we were accustomed to before COVID,” she said. “I think it will take at least a year.”

As for the longer term, Sullivan reiterated comments he made earlier this year when he said some manufacturers may not go back to those days when they built cars and then hoped dealers would sell them. They likely won’t build to order, although that’s possible, he said, but they may build fewer cars and put the hard focus on models they know the customer wants.

“Most of the manufacturers have decided that just ‘build, build, build, build, build’ isn’t that profitable for them,” he explained, “because all the cars end up on our lots, and we have to find a way to get rid of them, and they have to put incentives on them. There is a level of production that makes more sense to them.

“We’re not going to be this order-to-delivery industry, because when people want something, they want it very quickly, and some want it now,” he went on, adding that, despite this, levels of overall ground stock will likely be lower in the years to become, perhaps 75% of their current levels.

 

Bottom Line

But there are still far too many unknowns to make any hard projections about the future, said those we spoke with, adding that, right now, they’re dealing with right now.

And that’s the picture that comes clearly into focus on that screen in Rome’s office. Things are not as they were, and they may not be like that for a while — if ever again, in some respects.

“This is a year unlike anything I’ve seen in all the years I’ve been in this business,” said Cosenzi, who spoke for everyone in the industry with those comments, adding that, while the picture is slowly improving, what would be considered normal is still far down the road.

 

George O’Brien can be reached at [email protected]

Auto Dealers Finish Strong and Look Ahead to 2021

By Contributor
Autos Special Coverage

Revving Up

By Mark Morris

 

In the early days of the pandemic, people huddled in their homes while streets were abandoned by nearly all traffic. Area auto dealers, understandably, braced for a slow year.

Instead, sales for many dealers hit record highs in 2020.

It was that kind of year for Jack Sarat, dealer principal for Sarat Ford, who said the pandemic definitely kept sales down in March. “After that, business rebounded, starting with a strong finish in April, and then every month following kept getting better.”

Auto-manufacturing facilities and many of their subcontractors around the world experienced shutdowns early in the pandemic. Steve Lewis, owner and president of Steve Lewis Subaru, said the delays kept inventories low at many dealerships and were also a factor in sluggish sales early in the spring.

“Once the factories were up and running again, around May or June, our inventory started to build back up, and it continues to build,” Lewis said. “Believe it or not, 2020 was our best year ever.”

“After [March], business rebounded, starting with a strong finish in April, and then every month following kept getting better.”

Even with inventory delays, Lewis continued to take pre-sell orders, so when new cars began rolling into the lot, nearly 65% of them were already sold.

Gary Rome, president of Gary Rome Auto Group, said the Korean factories where Hyundai and Kia are made were fortunate, with only brief shutdowns due to COVID-19 concerns.

“Hyundai and Kia never took their foot off the gas when the pandemic hit,” Rome said, which set the table for a strong year. “Our sales increased nearly 20% in 2020; it was one of the best years we’ve ever had.”

Every year, Presidents’ Day represents the first big sales push for local dealerships. Sarat pointed out that Presidents’ Day as a sales event tends to be more of a Northeast phenomenon.

Jack Sarat (left) and Jeff Sarat

Jack Sarat (left) and Jeff Sarat are among many area dealers reporting strong sales down the stretch in 2020 and into 2021.

“In Virginia, if you ask about the Presidents’ Day sale for cars, they don’t even know what you’re talking about,” he said, adding that ‘Presidents’ Month’ might be a more accurate name because the manufacturers heavily promote sales incentives throughout February.

With an already strong January in the books, Lewis approaches this Presidents’ Day understanding each year is a different experience.

“Last Presidents’ Day, we had a great weekend. Some years sales are magnificent, other years we are slow,” he said, adding that he defines the weekend as running from the Thursday before the holiday through Presidents’ Day Monday.

Good weather is the key to strong President’s Day sales, Rome said. Encouraging car sales on Presidents’ Day has often been a way for people to start thinking about spring and new beginnings.

Steve Lewis

“Once the factories were up and running again, around May or June, our inventory started to build back up, and it continues to build. Believe it or not, 2020 was our best year ever.”

This year, they may be especially clamoring for spring; on top of the normal winter doldrums, everyone has endured nearly a year of pandemic disruption and isolation. In that environment, auto dealers expect plenty of pent-up demand.

 

Rolling Along

Each of the dealers who spoke with BusinessWest shared his thoughts on why people continue to buy cars during the pandemic.

Those who did not suffer a job loss due to COVID-19 were able, in many cases, to increase their savings. After months of staying inside people, Lewis said, people started doing the math and realized that, with used-car values remaining high, they could trade up to a newer vehicle without spending lots of money.

“They capitalized on it, we capitalized on it, and everybody’s happy,” he added.

Sarat talked about customers who canceled vacations that involved air travel but still wanted to get away. “Several customers told me they were buying vehicles just so they could drive to their vacation,” he said.

While zero-percent interest rates across the industry have helped reluctant buyers, Rome said a job-assurance program gave Hyundai customers more comfort about making a purchase. “Through this program, if you buy a car and lose your job, Hyundai will make your payments for up to six months.”

He also believes battling COVID fatigue played a role in many vehicle-purchasing decisions. “People started realizing that life is short, and this might be a good time to do something nice for themselves.”

The pandemic has produced an interesting economic situation in which many homeowners made big investments in their homes, resulting in an extremely successful year for construction and landscape contractors. Sarat reaped the benefit of the contractors’ good fortune in his commercial-truck business. Contractors tend to replace their vehicles in December to obtain a tax credit against their income for the year, so it’s not unusual to see more sales activity then. Thus, the boom in home improvements in 2020 contributed to record sales in December for Sarat.

“We sold twice as many Super Duty trucks than a normal December,” he said. “Contractors were replacing vehicles and, in some cases, adding to their fleet.” Super Duty trucks are a popular choice among contractors because they can be adapted to a variety of trade professions.

While online shopping and purchasing a vehicle are not new, the pandemic brought out more people interested in using this no-touch approach to buying. Before the pandemic, Lewis noted, nearly 45% of his business was generated from the internet, where customers would do their research online, then come in for a test drive before buying the car. Since the pandemic, that’s increased to 70%.

“What’s different now is that people are taking delivery of vehicles they’ve never seen or have driven,” he said, adding that customers who do this are relying on the brand’s reputation.

Website upgrades since the pandemic allow Rome’s customers to complete their entire vehicle purchase online. From figuring out the value of a trade-in to applying for credit, the entire purchase or lease can be generated online and finished off with an electronic signature. “We will even bring the car to your home to test drive if you want,” he added.

Before internet research, the average customer would visit three or four dealers before purchasing a vehicle. Sarat cited industry statistics showing that customers now visit, on average, only 1.3 dealers before making a purchase. “Because they’ve done the research online, they’ve usually made a decision on what they want to buy before they even come in.”

 

Shifting Gears

For several years, buying trends have shifted away from passenger cars and toward SUVs and crossover vehicles.

“SUVs make up 68% of our sales, compared to sedans,” Rome said. “It used to be the inverse.”

He credits the shift to SUVs handling more like a car than earlier models, which were built on truck frames. He also noted that, as buyers age, they prefer a higher vehicle to make it easier to enter and exit.

“We won’t be back to normal for a while, but everything I read in automotive reports suggests new-car sales in 2021 are going to be very strong . I think it’s going to be an exciting year.”

Nearly every model in Lewis’ showroom is an SUV or crossover vehicle. “The crossover is really a replacement for the old station wagon,” he said. “It’s designed to open up the hatchback, put the back seats down, and throw in your junk.”

Ford is another of the many manufacturers moving away from traditional sedans and toward crossovers and SUVs. In addition, Sarat sells one of the most popular vehicles in the U.S., the Ford F-150 pickup truck, calling it his “bread and butter.”

Ford recently released a hybrid version of the popular pickup truck, and the new Ford Mustang Mach E is an all-electric vehicle. And Sarat has made a move toward all-electric vehicles among commercial cargo vans as well. Jeff Sarat, general sales manager, said these vans can run up to 300 miles a day and then plug in for recharging overnight.

“For business owners, it significantly reduces the cost of ownership,” he said, noting that an electric motor eliminates traditional maintenance and substantially reduces the vehicle’s carbon footprint. “We’ve got a lot of good things coming down the road, and our electric vehicles are going to be on people’s shopping list when they look for their next car.”

While hybrid and electric vehicle sales represent about 5% of Rome’s sales, he expects that number to rise to 10% soon.

“The manufacturers have jumped into this market with both feet. Within two years, we expect to offer a dozen hybrid or electric vehicles,” he said, adding that hybrid vehicles can improve mileage up to 140 miles per gallon, while some all-electric vehicles can go 386 miles on a full charge.

“In some ways, it’s like owning an iPhone, where you want to get a new one every three years to stay up on the latest technology,” he added.

Another shift this year has taken place in the used-car market. The economic shutdown last spring affected new-car production, and dealers found they had more empty spaces on their lots. “When fewer new vehicles are coming in, it also creates a lack of used inventory because people are not trading in their cars,” Sarat said.

For this reason, all the dealers we spoke with said used-car prices stayed high last year and will continue to remain strong in 2021.

Rome acknowledged the strength of the used-car market, but said his business runs somewhat counter to the normal trend.

“In our world, we sell about two new cars to every used car,” he explained. “If you can buy a new car with a 10-year, 100,000-mile warranty for about the same price as a used car, why would you buy the used car?”

 

No Slowing Down

With his business finishing 2020 with a 19% sales increase, Rome predicts an 18% increase on top of last year’s success for 2021.

With his dealership in Hadley, Lewis noted that he is located two miles from five colleges and universities. When students and faculty all abandoned campus early in the pandemic, it cut deep into his business. He is hopeful these sales will return as everyone comes back to campus.

“Despite all that, we had our best year ever, and we’re hoping 2021 is as good as 2020,” he said.

Jack Sarat anticipates at least some supply disruptions due to COVID in 2021, but remains optimistic for a good year ahead as well.

“We won’t be back to normal for a while, but everything I read in automotive reports suggests new-car sales in 2021 are going to be very strong,” he said. “I think it’s going to be an exciting year.”

Dealers Keep on Trucking

By
Autos

Ben Sullivan, COO of Balise Motor Sales, says pick-up truck sales, especially those involving small trucks, have been moving steadily higher in recent years.

As Pick-ups Evolve and Offer Consumers More, Sales Spiral

While most of the focus in the auto-sales market has been on the meteoric rise of the SUV, pick-up truck sales have also been climbing, and for the same reasons. Like SUVs, the trucks now offer many of the features and amenities of a car — from leather seats to solid gas mileage.

Ben Sullivan notes that while SUVs and cars seem to be making all the news these days — the former because of how well they’re selling, and the latter because how they’re not selling — there is that third segment of the market that is making a lot of noise in its own right; trucks.
This is not a recent phenomenon, noted Sullivan, chief operating officer for Balise Motor Sales, adding that truck sales have been solid for some time and especially since the end of the recession and during the recent, and prolonged period of relatively low gas prices. But the number of truck sales continues to be move higher, and for several reasons, one in particular.

“What we’ve seen over the past decade is a significant investment by the manufacturers in not only styling, but ride comfort, quietness, electronics, safety equipment, and especially fuel economy,” said Sullivan. “To the point where they’ve made the pick-up truck probably the primary choice for people; they can drive it to the country club on the weekend and to a work site during the week. It gives people a lot of flexibility.”

He noted that while the sales of mid-sized, half-ton trucks (think Ford 150, Chevy Silverado, and Dodge Ram, the three most popular sellers, and in that order) have been relatively flat, there is considerable movement in the smaller-truck market, featuring brands like the Toyota Tacoma, Ford Ranger, and Chevy Colorado.

He called this development a “resurgence,” because small trucks were popular in the ’80s, then things cooled off considerably, and now, they’re picking up again (pun intended), and in rather dramatic fashion.

“For years, the small-pick-up-truck market fell dormant behind the explosive growth of the half-ton-pick-up-truck market,” he explained. “Been there’s been a real resurgence in the small pick-up.”

But while the smaller trucks are selling, there is solid movement across the board, especially when there are incentives available.
Indeed, Jeff Sarat, owner of Sarat Ford Lincoln in Agawam, said he normally sells about 20 to 25 super-duty trucks — that would be the F-250 through F-550 and up — each July. Last month, he sold 54, more than a 100% increase.

Jeff Sarat says pick-ups now offer almost everything cars and SUVs do, including solid gas mileage.

“Ford came out with some really aggressive programs — 0% for 72 months – so they created a market, which was phenomenal for business,” he said. “I had multiple customers buy more than one, because businesses — and that’s really who’s buying those type of trucks — they haven’t had that deal for three years.”

The response was quick, too, he added, as Ford didn’t even start the promotion until mid-July. “My guys just got on the phone and started calling people: “hey, we can lower your payment 100 bucks and put you in a brand-new truck.’ And people were flocking in. It was awesome.”
Ford agrees, extending what was supposed to be a two-week promotion through Labor Day, creating worries that Sarat might actually run out of trucks before the October-through-December season, which is traditionally a good time for truck sales — he usually sells about 100 super-duties over those three months — as businesses make year-end purchases for tax purposes.

Looking ahead, those we spoke with said truck sales, like SUVs, will continue to move higher at the expense of the car, because, again like SUVs, the product continues to evolve, improve, and provide more of what consumers are demanding.

Work in Progress

Sullivan recently relocated to Western Mass. from Texas, specifically the Dallas area. The Lone Star State is known for many things — from oil to cattle to Friday night football — but it might just be the pick-up truck capital of the world.

“They really like their pick-ups in Texas,” he said with a smile, noting that while nationally, one auto purchase in five is a pick-up, in Texas, it’s at least one in four. And in keeping with the state’s character, bigger — and better-appointed — is better.

“You’re not a gentleman cowboy unless you’re driving an F-250, which is a diesel engine, with King Ranch leather interior,” he said referring to the expensive brand of leather from that ranch in Texas. “And that thing is probably an $80,000 truck by the time everything is said and done.”
Western Massachusetts, and the Northeast as a whole, is a long way from Texas, geographically and also with regard to the popularity of pick-ups, but this region is gaining some ground in that regard, if you will, and numbers supplied by Sullivan bear this out.

He said that since the start of the year in Massachusetts, Connecticut, and Rhode Island, roughly 300,000 vehicles have been sold. Of those, 31,000 would be considered mid-sized, half-ton trucks; 20,000 are larger work trucks, and 13,000 are smaller, quarter-ton trucks, leaving a total of 54,000 pickups sold to date, not quite 20% of the total volume of vehicles.

And, as noted, while the biggest surge has been with the smaller trucks, sales are steady across the board, thanks to a still-solid economy that is fueling sales to consumers and businesses alike, and especially the former.

“Those guys are having good years, and they’re adding people,” said Sarat, referring to the builders, contractors, landscapers, and others that rely on larger trucks and work them hard. “When the economy is up, it’s good for everybody, and that especially helps us because we specialize in trucks.”

And the numbers are only expected to climb higher for those reasons cited earlier by those we spoke with. Where once people had to sacrifice things like comfort, luxury, room, technological bells and whistles, and especially gas mileage when they bought a pickup, now, they don’t have to.

Indeed, Sarat used the Ford F-150 to get his points home. This model remains popular among non-commercial drivers, although some businesses use them in their fleets as well. ‘I drive one,” Sarat said. “If you have a family of five, you can all hop in it and go somewhere — and put something in the bed if you need to.”

And, as noted, the trucks are becoming more car-like in terms of comfort and features which each passing model year.

“Every year, the technology gets better, and the safety features get better,” Sarat said. “I have an app on my phone that I can use to start my truck anywhere in the world. If a check-engine light goes on, from that app on my phone, I can see, ‘OK it’s an oxygen sensor, I’ve got to get it in for service,’ or maybe it’s nothing major, and it’s on because this is something I can fix.”

Safety features like self-parking and anti-collision assist are common in today’s trucks as well, and self-driving vehicles aren’t far away, he added. Plug-in hybrid options are creeping into the truck market as well, for people who crave fuel efficiency – or just want to use less fossil fuels. Even traditional, gas-powered trucks are being built with fuel economy in mind.

“I just drove to Ohio last week with my son, 580 miles. And I got out there on one tank of gas,” he said. “My fuel economy was better than I’ve ever had in any truck. Once I got out there, I still had about 100 miles left. That, to me, was impressive.”

Whether it’s efficiency, safety, or other technology, “it’s slowly getting better,” Sarat said. “It’s ever-changing. They’re definitely not stagnant, that’s for sure.”

Sullivan agreed, adding that all these amenities obviously come with a cost, but it is one that consumers seem ready and willing to pay.

“Manufacturers still have to make the affordable work trucks,” he explained, adding that there’s a work-truck grade, a grade above that, and maybe a few above that. “But by the time you’re done with the leather interiors, the technology and the touch-screen displays, the heated and cooled leather seats, you can drive the price of those trucks up quite a bit.”

By that he meant north of $60,000 or $70,000 — and even higher if one wants a fully loaded F-150 King Ranch. And what’s interesting, he noted, is that the manufacturers haven’t yet determined just what the ceiling is for these vehicles in terms of luxury and appointments — and what people might be willing to pay for all that.

“What the manufacturers have been playing with at the top is … ‘how much truck is too much so that no one will buy it?’” he told BusinessWest. “I don’t think they’ve found that yet.”

The Ride Stuff

While Texas and the rest of the pick-up-truck buying world awaits an answer to that question, dealers here and seemingly everywhere continue to record healthy sales of the vehicles.

It’s a movement that seems destined to continue and probably accelerate, because today’s trucks are not yesterday’s trucks.
As Sarat noted, they are anything but stagnant. They are moving — in every sense of that word.

George O’Brien can be reached at
[email protected]

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