Despite auto industry woes and closures, local sales stay stable

Few sectors have been impacted by the recent recession as severely as the automotive industry.

With General Motors filing for bankruptcy protection on Monday and Chrysler currently under protection, in addition to other automakers seeing reduced sales nationally, some car companies have had one of the roughest years in their history.

One local dealership that has been directly impacted is O’Brien Chrysler, 1111 O’Brien Dr. In mid-May, Chrysler announced it would be closing more than 700 dealerships as part of its restructuring plan. O’Brien is one of the dealers closing on June 9, said Jim Turner, president of the auto park.

National sales for the month of May were down for most car companies from the previous year, from 24 percent and 29 percent at Ford and GM respectively, to 47 percent at Chrysler and 49 percent at Honda, according to company reports.

Although Turner and the people at the dealership are not happy about losing Chrysler, he said the closure will not have a significant impact on the auto park, which also sells cars from Hyundai, Kia, Mazda, Mitsubishi, Scion, Toyota and Volkswagen.

“To put things in perspective, when the announcement was made, we had 2000 cars on the lot and only 40 of those were Chryslers. We sold about five or six a month,” Turner said.

Chrysler sales at O’Brien have actually increased since the announcement was made, Turner said. He attributed this to increased advertising to move the cars out. However, Chrysler sales were down at the dealership in 2008 over 2007.

Employees, as well as Chrysler vehicle service, will not be affected by the closure, Turner said.

“We have a plan to move the cars to other O’Brien franchises in the area, so it’s not like we’ll be losing thousands of dollars,” he said. “It won’t make or break us.”

Mahindra, an Indian truck and SUV manufacturer new to the United States, will replace the Chrysler space in the fall, Turner said.

Although General Motors has also fallen on hard times, Chevrolet and Cadillac dealer Sullivan-Parkhill in Champaign has reported increased sales this year, said sales manager George Longfellow.

“Sales are actually up for the first quarter of this year over 2008, and we were up in sales for 11 of 12 months in 2008,” Longfellow said. “In May 2008, we sold 36 new cars, and in May 2009 we sold 41.”

Longfellow attributed the strong sales the healthy local economy.

“Nobody is untouchable, but the hospitals and University keep us up here,” he said.

As part of its restructuring, GM plans to eliminate its Pontiac, Hummer and possibly Saturn brands. Although Sullivan-Parkhill does not carry any of them, Longfellow sees the eliminations as an opportunity.

“We could help with the service business, since we can service all GM brands here. As other brands go away, we could see extra opportunities,” he said in regards to sales.

Across town in Savoy, Jon Ile, general manager of Twin City Honda and BMW, had a similar story.

“Countywide and maybe even regionally, numbers have been good. We haven’t had significant layoffs and people feel better about spending money here,” Ile said.

Still, circumstances are not perfect.

“I think everyone is impacted in our business. People see stories about the recession in the media, and if they hear the economy is bad they don’t want to spend, even if their economy isn’t as affected,” Ile said.

Although he would not release specific sales numbers, he said the dealership’s sales have been keeping pace with Honda’s, both regionally and nationally, for the year.

“Last year was a great year for imports,” Ile said. “Sales were huge because of $4 gas, but they peaked there, and as gas prices eased, sales eased also. I’d be surprised if we weren’t down for (May) just because May 2008 was the best month for sales in the company’s history.”

Higher-end brands such as Mercedes and Volvo have worked to adapt to the year’s economic conditions, said Ken Moerdyk, manager of Sullivan-Parkhill Imports in Champaign, which sells both brands.

“Mercedes anticipated the sales drop and reduced imports to the U.S. by 100,000 vehicles for the year,” he said.

Used car sales at the dealership, however, are up around 30 percent so far this year, he said.

Volvo has seen a greater sales drop than Mercedes, and has worked to counteract this by increasing warranty benefits and offering free maintenance and parts such as brake pads and windshield wiper blades, Moerdyk said.

“Everyone is working to adjust,” he said.