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Rebounding Inventory, Return of Incentives Boost Auto Sales Locally

By
Brian Houser, general manager of Balise Hyundai
Autos Special Coverage

Shifting into a Higher Gear

Brian Houser, general manager of Balise Hyundai

Brian Houser, general manager of Balise Hyundai, says factors ranging from inventory to incentives are trending in an optimistic direction.

 

It can be tough to find a parking spot at Marcotte Ford, but Sue Keller says that’s a good problem to have.

Over the past few years, “we got creative, like skipping every space, trying to look like we had more inventory,” she told BusinessWest. “But now, it’s great to see a full fleet out there. And I think it’s just brought up the morale for the whole team here, which is nice.

“When the truck pulls up now, the sales team are like little kids in the window — they want to see what’s rolling off, what’s coming in, and then they sit down and look at who’s put requests in,” added Keller, the dealership’s marketing director. “I feel like the sales team is more upbeat with more inventory. It’s a better vibe out there. They’re ready to sell, and they have it to sell now.”

Inventory, in fact, seems to be the biggest positive development in auto sales across the region, following a pandemic-related shortage that, as Keller noted, forced dealerships to get creative on half-empty lots.

“Inventory is back to being healthy,” said Mike Marcotte, president of the Holyoke-based store. “So when a customer comes in here, compared to six months ago, they have more options, more colors. And then, if they want to factory-order something, Ford has streamlined it, and it’s coming in faster, which is great. Before, the lead time was four to six months; now, it’s a lot faster with the production cycle.

“I feel like the sales team is more upbeat with more inventory. It’s a better vibe out there. They’re ready to sell, and they have it to sell now.”

“So customers can choose exactly what they want instead of settling on something,” he added. “And they can see it. Instead of looking online for a picture, they can see it in person, and drive away that day if they want.”

Brian Houser, general manager of Balise Hyundai in Springfield, has seen a similar inventory rebound.

Mike Marcotte says having plenty of inventory

Mike Marcotte says having plenty of inventory on the lot is important not just to give buyers options, but because they want to see and touch what they’ll be buying.

“Most brands have been able to fill their lots back so customers have more varieties and choices,” he said, adding that, while used-car access continues to fluctuate following a recent drought, new-car selection is strong. “Consumers have been coming out. They have an opportunity to test drive more makes and models. Before, they’d show up on a parking lot, and there wouldn’t be any inventory for them to even test drive. Now, they have more opportunity to see exactly what they’re looking for.”

Carla Cosenzi, president of TommyCar Auto Group, agreed.

“Inventory levels have improved significantly,” she said. “Our used-vehicle inventory is robust, thanks to our trade-in programs and strategic sourcing, ensuring a wide range of options for our customers. Additionally, we have over 500 new vehicles across our five brands, providing an extensive selection for buyers.”

Business across the TommyCar dealerships has been strong in 2024, she added, with consistent demand for both new and pre-owned vehicles.

“We use live market pricing to always ensure we are priced competitively in the market, and these are some of the best incentives we have seen from the manufacturers,” she added, noting a range of incentives to attract buyers, including low-interest financing, lease specials, cash rebates, and loyalty programs, in addition to TommyCar-specific perks like 15% back on service spending (which can be used toward a future car purchase), gift certificates when customers hit certain points in their rewards account, and complimentary service loaners.

“We had a great start to July, and we’re actually looking for a bigger second half of the year than the first half of the year.”

With more inventory, Ford has enhanced its rebates as well, Marcotte noted, like 2.99% financing on a Ford F-150 that kicked off on July 15 and will continue through the summer.

“They’re trying to stay more consistent over a longer period. So it’s not 15 days — it will last the whole month or the whole summer. So we can plan inventory accordingly and reach out to customers that may be in the market or were in the market, and tell them this special is out right now.”

As a result, “we had a great start to July, and we’re actually looking for a bigger second half of the year than the first half of the year,” he added. “Especially as a big commercial truck dealer, with Super Duties and Transits, we’re also ramping up for that, for the end of the year.”

The luxury vehicle market is robust as well, according to Peter Wirth, who co-owns Mercedes-Benz of Springfield with his wife, Michelle Wirth.

“It’s a good environment for us. Inventory levels are back to pre-pandemic levels,” he said, adding that SUV sales are especially strong, citing the brand’s GLC and GLE models.

Michelle and Peter Wirth

Michelle and Peter Wirth say customers are often surprised that some luxury cars at Mercedes-Benz of Springfield aren’t far from the price points at other dealerships.

“We have always had a powertrain for any liking, whether you want a gas-powered vehicle, an all-electric vehicle, or a plug-in hybrid,” Michelle added. “People may not realize they can afford a Mercedes — they may not realize that, when they’re driving other cars, their price point is similar to ours.”

 

EV Landscape in Flux

One trend that seems to have slowed nationally is the realm of electric vehicles. Locally, however, dealers are still embracing their potential.

“We’ve actually been doing steady with it. Our whole team has learned it, so it’s not just one or two specialists; they’re all fluent with it,” Marcotte said, adding that his dealership has invested in high-speed charging stations as well, so customers can familiarize themselves with them. Meanwhile, state and federal incentives and rebates continue to be attractive, he added.

While some customers remain leery about charging infrastructure and how that affects range, he noted that hybrids continue to sell well, serving as a mileage-efficient middle ground between all-gas vehicles and electrics.

“We want people to feel comfortable. We don’t want them to make a purchase and not feel comfortable. Obviously, with all the different chargers in the area, once you start looking for them, you start seeing more and more. And then you can do the at-home charger.”

That said, EVs — Ford offers the Mach-E, the F-150 Lightning, and the E-Transit — represented 8% of Marcotte’s business in June. “And then we’ll have new products in 2026 and 2027. So that’s been going well. We’re glad we can offer all those ranges — EVs, gas, hybrid, and commercial diesels.”

Cosenzi said she’s seeing increased incentives for electric vehicles and hybrid models, reflecting the industry’s push towards sustainable mobility, and TommyCar has prepared for that shift by expanding its EV inventory and investing in charging stations. “These incentives make it an excellent time for customers to explore both traditional and alternative fuel vehicles.”

“We have charging stations on our campus. But until your condo complexes have them set up, your Starbucks, your Dunkin’ Donuts, places that people can spend 15 to 20 minutes charging their vehicle … until you start to see that, it’s going to be tough for the average consumer.”

Houser said “range anxiety” is still a factor, even though range on EVs has increased substantially and charging stations continue to spring up.

“And there are still plenty of incentives from the state and federal government that are incentivizing these customers to buy EVs,” he noted. “But the infrastructure is the most important thing. We have charging stations on our campus. But until your condo complexes have them set up, your Starbucks, your Dunkin’ Donuts, places that people can spend 15 to 20 minutes charging their vehicle … until you start to see that, it’s going to be tough for the average consumer.”

For now, he agrees with Marcotte that many consumers who desire the mileage of an electric vehicle are more comforable with hybrids.

“The benefit of the hybrid is you don’t have to worry about charging it; the battery itself does it,” Houser noted. “When you’re doing your braking, your regenerative braking system powers everything so there’s no range anxiety of what could go wrong if you can’t get it charged — you’re just putting gas in and relying on the mechanics of the vehicle.”

Peter Wirth said EV adoption has been lower than anticipated, while hybrids remain very much in demand, and Mercedes-Benz of Springfield is stocking accordingly. But he agrees with others that, once people become more comfortable with charge-station availability, both locally and nationally, the future is still bright for all-electric cars and trucks.

“Nobody has a crystal ball,” Michelle added. “But it only stands to reason that, as the charging infrastructure grows in the area, so will the adoption.”

 

Drive Time

That said, business is normalizing, for both Mercedes as a whole and the Wirths’ Chicopee-based dealership.

“It’s been only seven years, so we’re still getting known in this market,” Peter said. “We’re still selling new cars, factory orders are back to pre-pandemic lead times, and, for customers, the deals are back. Leasing and financing deals are important for us so we can stay competitive.”

TommyCar continues to grow, Conzenzi said, even at a time when all sectors are struggling with talent retention. “We focus on creating a positive work environment, offering competitive compensation, and providing continuous training and development opportunities. Our culture emphasizes teamwork, innovation, and customer-centric service, which helps us attract and retain dedicated professionals.”

The main downside for consumers right now, Houser said, is felt by those who bought at a high point in the market and may be upside down on their loan compared to what their always-depreciating vehicle is worth.

“A lot of people avoid that by leasing a vehicle. Or, if you’ve got to hunker down and keep your vehicle, try to put more money into principal because so many consumers put no money down, rolling in all the taxes and registration fees, and then, at that point, you’re financing the full amount at a high retail price that didn’t have incentives or programs before.”

With the average monthly car payment in the U.S. around $700, Houser added, he’s seeing more consumers finance for a longer period — six or seven years instead of five. “But over the long haul, they have to hopefully realize how much money is going to the bank when you’re financing a car for a longer period of time.”

That’s why the return of rate and rebate incentives are so welcome, he noted, and why new cars are starting to look better than used ones, which rely on local bank financing at higher rates than new cars.

“And the rebates are back in play,” he added. “I’m sure you’ve heard the TV ads. When COVID was going on, you didn’t hear the radio, TV, or billboard ads for two, three, four, five thousand dollars off. Now that inventory is back, we have to get these vehicles into people’s driveways, and the manufacturers give us incentives in order to help us out with that.”

Golf Retail Is Also Booming, Thanks to New Interest, Stimulus

By
Dave DiRico
Sports & Leisure

Buy the Buy

Dave DiRico

Dave DiRico says many people who discovered or rediscovered golf in 2020 are coming back to buy new equipment in 2021.

Dave DiRico says his shop is usually busy in late March and early April as golfers gear up for a new season.

This year, the look and feel have been different, and for many reasons. Golf got an unexpected and much-deserved boost last year when it became one of the few organized sports people could take part in. And it’s received another boost from the fact that Americans have been saving money as perhaps never before, and many of them have also been receiving stimulus checks from the government.

Add it all up, and March and April have been even busier than normal, said DiRico, owner of Dave DiRico’s Golf & Racquet, adding that, for now, he doesn’t see many signs of slowing down.

“We’re seeing it at all levels, all age groups, starting with the seniors,” he said. “They didn’t travel as much over the past year. They haven’t gone out to dinner; they didn’t go on their spring golf trip to Florida. And we’re seeing more of those people buying clubs — and that’s generally not our soft spot.”

That soft spot would be younger professionals and junior golfers, he went on, adding that these people are buying clubs, too, often with the help of the government.

Meanwhile, large numbers of people took up the game last year, or found it again after drifting away from it for whatever reason. Many of these people bought used equipment last year — so much that inventories dwindled significantly — and this year, they’re coming back for new clubs.

“Most of them are deciding to continue to play — they enjoyed it,” DiRico said. “And they’re trading in their used equipment for new stuff — because they intend to stay with it.”

The surge in play and its impact on the retail side of the game is reflected in the numbers. In the third quarter of 2020, for example, retail sales of golf equipment exceeded $1 billion for the first time ever for that period, according to Golf Datatech, an industry research firm. Meanwhile, Callaway Golf Co., which manufactures golf balls in Chicopee, reported a 20% surge in sales in the fourth quarter of 2020.

The problem some players are encountering, though, is limited inventories of new equipment. Indeed, the golf manufacturers, like those who make cars and countless other products, are experiencing supply-chain issues and difficulties getting the materials they need. This has led to sometimes lengthy waits for ordered clubs to be delivered.

“There’s such an increased demand with new golfers across the country that they’re all running out of equipment,” he explained. “They can only manufacture so much, and the demand is far more then they projected. Some companies can’t get shafts, others can’t get grips — you can’t make a golf club unless you have all the components.

“We have a few companies that are great — they’ve managed to stay ahead of this, and they’re doing very well,” he went on. “But then, we have some other companies … you have to wait 15 weeks to get a set of irons.”

Doing some quick math, DiRico said this will translate into delivery sometime in June, far longer than golfers anxious to get their hands on new irons or a new driver want to wait.

But, overall, this would have to be considered a good problem to have — if such things actually exist in business.

Only a few years ago, the golf industry was in a sharp decline, with membership down at most clubs, tee times readily available at public facilities, and racks full of new equipment for which there wasn’t strong demand. Things have changed in a hurry, and DiRico and others hope most of these trends — not the current supply-and-demand issues, certainly — have some permanence to them.

 

—George O’Brien

Region’s Courses Have to ‘Make the Game Sticky’

By
Sports & Leisure

A Simple Mission

Just over a year ago this time, Jesse Menachem and his staff at the Massachusetts Golf Assoc. (MGA) were fighting — and fighting hard — to convince the state simply to let golf-course owners maintain their property.

Despite some intense lobbying by his group, Gov. Charlie Baker made golf courses part of his broad shutdown of non-essential businesses in March 2020, and for weeks, the industry lingered in a sort of limbo, not knowing when, if, and under what circumstances courses would be allowed to reopen.

When they did, in mid-May, a number of limiting restrictions kept play at modest levels. But then … the lid came off, and the industry found itself in an enviable position. Indeed, golf was one of the few activities people could take part in during the pandemic, and people started taking it up — or taking it up again, as the case may be, a development that benefited public and private courses alike.

“I’ve heard from clubs that recorded anywhere from a 20% to 50% increase in rounds, which is incredible, because capacity was limited due to the longer intervals between tee times, as mandated by the state,” said Menachem, president of the MGA. “You couldn’t find tee times on weekends at many facilities; with people working from home, working remotely, not traveling, not having family activities like Little League and soccer, golf became number one in a lot of people’s minds, and the game really benefited.”

Jesse Menachem

Jesse Menachem

“If we can sustain or retain at least 25% to 33% of those who participated last year … that’s a goal; that’s a start. More would be great, but we have to be realistic.”

Now, as the 2021 season gets set to begin in earnest (some courses have already been open for several weeks), the golf industry has a simple, yet also complex, mission that Menachem summed up directly and succinctly: “make it sticky.”

By that, he meant those managing the state’s courses have to take advantage of this huge opportunity they’ve been granted and compel those who took to golf last year, because there were few attractive options, stay with the game now that other options exist.

“That’s our job; that’s what we’re up against — we have to make sure it’s sticky, and that’s something we have not been very good at,” he explained. “If we can sustain or retain at least 25% to 33% of those who participated last year … that’s a goal; that’s a start. More would be great, but we have to be realistic.”

Indeed, as they go about this mission, courses will have advantages and selling points they didn’t have last year, said Menachem, especially when it comes to their 19th holes, many of which were closed in 2020, while those that were open faced a mountain of restrictions on what they could serve, when, and how. They have also learned some lessons from last year, including how those longer intervals between tee times improved pace of play, reduced logjams on the course, and improved the overall player experience.

But golf will also be facing far more competition in 2021 when it comes to the time, attention, and spending dollars of those who found the game a year ago. Indeed, as restrictions are eased, individuals and families can return to restaurants, museums, the cottage at the beach, and more.

For course owners and managers, the emphasis must be on providing a solid experience, one that prompts a return visit — or several. This has always been the emphasis, he said, but now even moreso, with courses being presented with what would have to be a considered a unique opportunity.

“It’s really our obligation to make sure that experience is favorable,” Menachem told BusinessWest. “For those who are being reintroduced, or introduced for the first time, we’ve got to invite them back; we have to make them feel comfortable and cater to what their desires are. We have to do everything within our power to make sure that golfer on site has the best experience possible and keep them coming back.”

 

—George O’Brien

Facebook Set to Bring Community Boost Program to Springfield

By
Features

Bridging the Digital Divide

Aneesh Raman says business owners think Facebook, with its 2.2 billion users worldwide, is a valuable tool — even if they don’t always know how best to use it.

According to a 2017 survey, said Raman, who manages Facebook’s global economic-impact programs, more than 60% of small businesses in Massachusetts said Facebook is essential to their business, and 76% said the social-media platform helps them find customers in other cities, states, and countries.

“That’s encouraging data, but as you talk to them, you see a need for more training,” Raman told BusinessWest. “That’s why we’re coming to 30 cities to provide training for small businesses across a range of subjects. No matter what their skill level is — whether businesses are coming online for the first time or are online already — we can help them grow their business.”

Earlier this year, Facebook announced that Springfield had been chosen as one of 30 markets where the company will host its Community Boost program, created to help small businesses, entrepreneurs, and job seekers grow their business and develop new digital skills. Facebook will be in Springfield on Sept. 10-11, presenting workshops on a host of topics yet to be determined.

“Our mission at Facebook is building strong communities, and we believe at the core of strong communities are thriving small businesses,” said Raman, who is also a former journalist who worked as an international correspondent for CNN, as well as a former presidential speechwriter. “Small businesses are the engine of local economies. For years, we have worked with them, trained them online and offline, and helped them grow their business and help them hire more employees.”

Since 2011, he noted, Facebook has invested more than $1 billion to support small businesses. Community Boost is simply a more visible and direct method of doing so, and will focus on small-business training and digital acumen in general, rather than simply promoting Facebook, Raman said.

“Small businesses are the engine of local economies. For years, we have worked with them, trained them online and offline, and helped them grow their business and help them hire more employees.”

During its visits to 30 cities — including Houston, St. Louis, Minneapolis, San Diego, Pittsburgh, and many other metro areas much larger than Springfield — Facebook representatives will take a three-pronged approach to economic development, working with local organizations to provide digital skills and training for people in need of work, advising entrepreneurs how to get started, and helping existing businesses and nonprofits get the most out of the internet.

A broad survey conducted by Morning Consult and co-sponsored by the U.S. Chamber of Commerce and Facebook suggests that small businesses’ use of social media is creating new opportunities. For instance, in Massachusetts, 62% of surveyed businesses said Facebook is essential for their business; 76% said Facebook allows them to find customers in other cities, states, and countries; and 69% said they believe an individual’s digital and social-media skills are important when hiring.

A lot of people use Facebook for business reasons, but never any kind of training how to do it. They’re on their own,” said Paul Robbins, president of Paul Robbins Associets in Wilbraham and a communications consultant for Community Boost in Springfield.

“People feel like they’ve got this tool, but they don’t know how to use it, especially small businesses,” he went on. “Here in Springfield, we’ve got a very diverse community with a lot of small businesses. Even not-for-profits can take advantage of this free seminar. Anybody can come. The idea is to help people leverage it as a business tool.”

Logging On

Facebook pledged this year to train 1 million individuals and small business owners across the U.S. in digital and social-media skills by 2020. To do that, it will expand its in-person training programs, create more local partnerships, and build more e-learning resources.

The company cites projections that a skilled-labor shortage in America could create 85.2 million unfilled jobs by 2030, and says it is committed to helping close that skills gap and provide more people and business owners with the educational resources they need to advance at work, find new jobs, or run their companies.

Details on Springfield’s Community Boost event, which is free and open to small business and nonprofits, aren’t set yet; Facebook plans to announce a place, times, and course list at www.facebook.com/business/m/community-boost as September gets closer.

“The goal of the program isn’t to come and leave, but to kick off conversations,” Raman said, noting that Facebook has been talking to businesses and economic-development leaders on a specific program that best meets identified needs for small-business and digital-skills training in the Pioneer Valley.

“Small businesses and workers know they need skills. But they don’t always have help getting those skills,” he went on. “Once we know what the professional needs are, we’ll announce the registration date and courses online.”

According to the Morning Consult research, small businesses’ use of digital tools translates into new jobs and opportunities for communities across the country. And small businesses are the key driver, creating an estimated four out of every five new jobs in the U.S.

The survey revealed that 80% of U.S. small and medium-sized businesses on Facebook say the platform helps them connect to people in their local community, while one in three businesses on Facebook say they built their business on the platform, and 42% say they’ve hired more people due to growth since joining Facebook.

Businesses run by African-Americans, Latinos, veterans, and those with a disability are twice as likely to say that their business was built on Facebook, and one and a half times more likely to say they’ve hired more people since joining the platform.

Raman said small businesses have expressed a desire to learn more about using Facebook and Instagram, the photo- and video-sharing service owned by Facebook. “But we’re teaching skills that apply to any digital platform out there.”

After all, Robbins noted, “not everyone is digitally savvy. A small business may not have the digital skills people assume everyone has. Facebook is trying to demystify it to people, so they’re not afraid of it.”

Getting Social

Increasingly, businesses are embracing 21-st century modes of building their customer base. The 2017 survey by Morning Consult found that the use of digital platforms by American small businesses is ubiquitous — in fact, 84% of small businesses in the U.S. use at least one major digital platform to provide information to customers, and three out of four small businesses use digital platforms for sales.

Yet, businesses face challenges when it comes to the internet, with 57% of small businesses saying lack of familiarity with available digital tools is a challenge.

“At Facebook, we see a big opportunity to make a difference in partnership with local organizations and local officials,” Raman told BusinessWest. “We really do think there’s a skills gap, and by closing that, we can help expand economic opportunity in Springfield and across the country.”

But it’s not just employers the Community Boost program aims to reach. For job seekers, the program will provide training to help improve their digital and social-media skills. According to the research, 62% percent of U.S. small businesses using Facebook said digital or social-media skills are an important factor in their hiring decisions — even more important than where a candidate went to school.

Community Boost will also offer entrepreneurs training programs on how to use technology to turn an idea into a business, as well as ways to create a free online presence using Facebook.

And, of course, business owners will learn how to expand their digital footprint and find new customers around the corner and around the globe. Training will also include education in digital literacy and online safety.

“We also want to teach nonprofits to be part of the programming and how Facebook can help them learn the digital skills they need to increase donations,” Raman said.

Facebook strives to evolve Community Boost based on what it’s learning in its earlier stops. For example, in St. Louis, the first stop on the tour, the company learned exactly how wide the gap is between the digital skills job seekers know they need and the skills they feel they have. In fact, according to a survey there, 93% of job and skills seekers say digital skills are important when looking for job, while only 12% rate themselves highly in this area.

Managers also see gaps in the skills they need to grow their businesses, the St. Louis survey showed. For example, the majority of managers in that city said creating a mobile-friendly interface was important to growing their business, but very few saw themselves as proficient.

Springfield — the only New England stop for Community Boost — may not have the population of the major metropolitan areas on the tour, but Raman says the needs are universal, and Facebook wants a diverse cross-section of cities represented.

“Springfield has a vibrant small-business community with a diverse population,” he noted. “We think we can make a real impact here.”


Joseph Bednar can be reached at [email protected]