Local auto dealers increase sales in national slump

By Don Shilling

One cause could be that areas other than the Valley have been harder-hit economically.

VINDICATOR BUSINESS EDITOR

Sales of the Chevrolet Cobalt plummeted to their lowest level since the early days of the model as consumers nationwide put the brakes on spending.

The 60 percent drop in Cobalt’s October sales comes as rumors circulate within the Lordstown assembly plant that staffing cutbacks are coming. Union leaders tried to squelch the rumors Friday by putting out a flier to members that said no reductions have been approved.

Mike Hudock, general manager of Stadium GM Superstore in Salem, said the Cobalt sales slump isn’t good for Lordstown but would be easy to turn around.

“They could change this in two weeks with advertising and incentives,” he said.

In fact, GM told dealers Monday that it was moving up its annual “red tag” sales promotion by two weeks to start this week. Hudock said the promotion should help sales by lowering prices and keeping a $1,500 rebate on Cobalts.

Barry Gonis, general manager of Spitzer Chevrolet in North Jackson, said he thinks declining gas prices also have slowed demand for the Cobalt.

GM said Monday that it sold 6,478 Cobalts last month, compared with 16,505 in October 2007. Last month’s total was the worst monthly sales figure since December 2004 when the Lordstown plant was in just its second month of producing the car.

Sales of the Pontiac G5, also made in Lordstown, fell from 2,519 last October to 812 last month.

The drops came amid an industrywide slump. GM reported a 45 percent decline in U.S. sales in October, while Chrysler sales tumbled 35 percent, Ford’s were off 30 percent, Toyota’s were down 23 percent and Honda’s fell 25 percent.

If adjusted for population growth, October was the industry’s worst sales month since World War II, GM said.

Hudock and Gonis said, however, that new vehicle sales at their dealerships were up. Gonis said the Spitzer dealership sold 80 new vehicles last month, compared with 55 in the same month last year.

Hudock and Gonis credited strong pickup truck sales, even though GM’s overall truck and sport utility vehicle sales were off 51 percent.

“We sold our Silverados silly,” Gonis said. “I’m sold out. If I had 10 or 15 more, I would have sold them.”

GM’s sales promotions for October were targeted at trucks, he said.

Gonis said he thinks GM sales have held up locally because of the large number of sales with employee discounts. Last month, GM allowed its employees to extend special incentives to two other people instead of the normal limit of one.

Hudock said that perhaps sales are down so much nationally because the economic slowdown has hurt other areas worse than it has the Mahoning Valley.

Nationally, the credit crunch has hurt the entire economy, both large corporations and family-run businesses, said Mark LaNeve, GM vice president of North America sales, service and marketing. It also has hurt consumer confidence, he said.

“We believe there is considerable pent-up demand from the last three years, but until the credit markets open up and consumer confidence improves, the entire U.S. economy, and any industry like autos that relies on financing will suffer,” he said.

GM sold 168,719 vehicles, down from 307,408 in the same month last year.

shilling@vindy.com