Car shoppers showing some interest -- at least in cyberspace
Are auto sales headed for a turnaround?
That’s probably too much to hope for, considering that the U.S. economy is reeling, credit markets remain dicey and the stock market is, well, the less said about that, the better.
But as the L.A. Auto Show prepares to open its doors to the public Friday, automotive website Edmunds.com has picked up a faint sign of life in an industry that just reported its worst sales since 1991.
Based on activity on its site, Edmunds.com said “car purchase intent” has risen 16% since election day. That’s based on site users pricing out options on vehicles — behavior that typically is followed by a trip to a dealer, according to Edmunds.com CEO Jeremy Anwyl.
“It seems there’s a pulse at least in the marketplace,” Anwyl said.
Autobytel, which operates rival car shopping site MyRide.com, is also seeing an uptick in buyer interest, based both on traffic to its site and the number of visitors who are actually asking dealers for quotes.
Any good news would be welcome for the automakers right about now. After reporting a 32% year-over-year drop in October sales, the car companies are on pace to sell 13.5 million vehicles in the U.S. this year, down from 16.1 million in 2007.
Anwyl thinks getting the presidential election out of the way may be helping.
"When you’re moving into a recession, you want your leaders in Washington to be voices of calm and confidence," he said, "and during an election campaign, that’s not what you hear.
"Now that level of noise has gone away."
It doesn’t hurt that dealers are offering big incentives on a wide range of vehicles. One Ford dealer in Maryland was offering a "buy one, get one free" deal last month in an effort to clear his lot of leftover 2007 pickups (buy a truck at full price -- get a 2008 Ford Focus free). Even Toyota is offering 0% financing on many of its vehicles.
Lower gas prices, meanwhile, have put more money in consumers' pockets and boosted interest in pickup trucks and other vehicles that don't get great gas mileage.
And credit, while tight, is still available and relatively cheap, although Anwyl noted that average down payments have crept up from 6% of the purchase price to 10%.
“You have to do a little bit of work,” he said. “It’s not like you can just roll into a dealership and GMAC is going to take care of you.”
We won’t know if the web-based prognosticating holds water until the automakers report their November sales early next month. Even if it does , Anwyl isn’t about to declare that happy days are here again for the industry.
“This could be a dead cat bounce, and we could see a continued decline,” he said. “My guess is that we’ll see some buoyancy between now and the of the year. But then in January, who knows?”
-- Martin Zimmerman
Photo of Lanham, Md., Ford dealership by Getty Images
