Central Texas New Vehicle Sales Up 17.1%

After two turbulent years that included the General Motors and Chrysler bankruptcies and a deep recession, Austin-area auto dealers are seeing a sharp turnaround.

New vehicle sales in Central Texas are up 17.1 percent for the first four months of the year, according to the Freeman Auto Group, a Dallas-based firm that tracks new-car registrations. Austin-area dealers sold 29,000 new vehicles in that period, compared with 24,760 in the same four months in 2010. For April alone, sales were up about 10 percent from the previous April, according to the report, which counted sales in Travis, Williamson, Hays, Bastrop, Burnet, Blanco and Caldwell counties. Those numbers put Austin in line with the rest of the nation, as U.S. sales of new vehicles were up 18 percent in April over the same month last year. That comes on the heels of a 24 percent year-over-year jump nationally in sales in March.

Michael Marks, executive director of the Austin Automobile Dealers Association, said Austin-area dealers learned during the recession and changed tactics to adapt to the new state of the economy. "Dealers are having to work harder for sales than they did some years ago, but the dealers here always find an innovative way to market and sell cars. They did that during the hard times, and that's lasted and carried over," Marks said.

Additionally, new local dealerships have opened for brands such as Fiat, Mini Cooper, the Fisker plug-in hybrid electric car and luxury models such as Rolls Royce.

Nyle Maxwell, who owns four area auto dealerships, said year-over-year sales at his Chrysler stores are up more than 70 percent in the first four months of 2011. Maxwell said the consistent strength of Austin's economy has helped area dealers weather the recession better than those in many other metro areas. "We didn't climb the mountaintop (before the recession), and consequently we're not going to be in the throes of Death Valley," said Maxwell, a former Round Rock mayor.  "That plays out in all portions of our economy, not just the car business." Maxwell — who owns Chrysler, Dodge, GMC and Fiat dealerships — said he's seeing consumers again focusing on quality, not just on price.  "Through the throes of the recession, people were deal-oriented; they just were not going to buy if it's not a deal," Maxwell said. "I think we're slowly replacing the deal mentality with: 'I want something I'm proud to drive, but something that also gives me good fuel efficiency."

Another factor in driving auto sales has been a loosening of consumer credit, experts say. During the recession, financial institutions clamped down on lending to people with less-than-perfect credit. Some of those restrictions are now easing. "It started loosening up last year, but when you've got people with good credit that couldn't (qualify), you've got a problem," Maxwell said. "We're starting to participate in the special finance market, which is the 'B' and 'C' and 'D' credit buyer... It's a bigger part of our volume now, a wider range of people with a wider range of credit scores." Paul Taylor, chief economist for the National Auto Dealers Association, said, "This is the year we finally have the consumer in the mood to buy and the financial providers are in the mood to lend.".

Rising fuel prices — gas has hovered close to $4 per gallon in much of the nation for the past month — have steered consumers toward smaller, more fuel-efficient vehicles, the national sales numbers show.

Still, in Austin — and Texas as a whole — the move to smaller vehicles hasn't been as pronounced, experts say. The three top-selling vehicles in Central Texas this year are trucks, based on registrations for January. Smaller cars "are selling better than in past years," said Marks of the Austin dealer association, "but I think Texas will always have a strong truck market."

Amid all the positive signs for automakers, experts caution that the U.S. auto industry remains in recovery mode. "We're still digging ourselves out of a hole," said George Magliano, director of North American automotive research for industry research firm IHS. Magliano said the U.S. market is on pace to sell about 13 million new vehicles this year. Though that's an improvement over 2010's 11.6 million units and from 2009, when sales were only about 10.4 million, it's still well below the 16 million units sold in 2007, before the recession began.

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