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High gas prices and a soft economy have a lot of people selling their truck or SUV for something a little more economical.
Kevin Gallagher had to sell dozens of his. The manager of Utah Auto Sales in Lindon recently sold his entire inventory at auction because of sluggish sales. Though his two lots stand nearly empty, he iterates that he's not out of business.
"With the outside advice of many financial experts in the field and the tough economic times coupled with gas prices, it was time to right-size the dealership," Gallagher said.
Fuel efficiency vs. heavy iron
He hopes to be selling inventory again in 30-60 days, but this time he'll be focusing on fuel-efficient cars. Before gas jumped to $4 a gallon and beyond, about 60 percent of his sales were trucks and SUVs. After gas prices soared, he was stuck with the wrong inventory.
"It was heavy iron, and the heavy iron didn't sell," Gallagher said.
He's not alone in his struggles, says Kirt Moyes, a dealer consultant.
"I think [dealers] are moving into a more conservative-type, fuel-efficient-type vehicle because that's what the consumers are looking for," Moyes said.
Nationally, the Big Three automakers have learned that the hard way. Recent quarterly earnings have shown some of the biggest losses in the history of Ford and GM, amounting to tens of billions of dollars.
At the same time, automakers like Toyota and Honda, which have focused on smaller vehicles, have been somewhat more insulated.
A smaller car -- new or used -- can have a direct impact on the pocketbook.
A bevy of commuter calculators show that for the 90-mile round trip from Provo to Salt Lake City, an economy car can save about $3,000 a year over an SUV in gas costs alone.
Gallagher, whose Utah Auto Sales has been around for 11 years, plans to rebuild on that sentiment, "with more economical vehicles than what we're used to carrying so that we can continue to serve the community."
Long-term resurgence?
Moyes said there will always be a workforce market for trucks and SUVs, even if the casual user is abandoning them for the moment. Often dropping in on dealer auctions, he said the heavy iron can be had for 50 cents on the dollar.
"If I had a million bucks I could hold onto for six months, I would buy all the diesel trucks and SUVs I could find," he said, noting that sales go in cycles every 10-15 years.
"It's like the stock market when its low. ... It's going to come back." |
..... ROFL..... The IA in the skies. HUH!!!!!
