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Driving Forces
Big gas prices fuel small car sales By
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| Corridor Inc. Staff Writer Originally published July 2008
Lamont Matthews, new car sales manager at Toyota of Glen Burnie, on the lot surrounded by unsold SUVs and trucks. Right: Toyota of Glen Burnie is dropping prices on its larger vehicles in an effort to move them off the lot. Photo by Marilyn Dimarco
Lamont Matthews used to spend most of his time finalizing truck trades. During a typical eight-hour workday, Matthews, new car sales manager at Toyota of Glen Burnie, used to see 70 percent of sales go to trucks. But escalating gas prices are driving car sales in a new direction. “Now the trucks and SUVs are sitting and sitting unless someone is getting it for a business purpose,” said Matthews. “More people now just want a commuter car to get them to and from work with good gas mileage.”
Car dealerships across the Baltimore-Washington Corridor are struggling as roaring gas prices, a slowing job market and tight economy crimp the demand for new cars and trucks. Maryland dealerships are facing a 20 percent drop in SUV sales this year, said Peter Kitzmiller, president of the Maryland Automobile Dealers Association. “Gas mileage is, if not at the top of consumer’s list, it’s second on the list,” said Kitzmiller. “A lot of people aren’t buying anything right now and would rather wait and see what happens with gas.” Most customers now want a basic, bare bones vehicle and sales of smaller, compact cars are on the rise, said Matthews, adding that the Toyota Corolla has been a popular choice recently. Currently, the Toyota Prius, a hybrid vehicle, is in high demand and people come in on a daily basis asking for it, said Matthews. “We had 10 to 15 sitting on the lot about a month ago and now we can’t even show one because we don’t have any left on the lot,” he said. “We have six orders for the Prius right now that we can’t even fill at the moment because of the high demand. Only three are coming in this month and they are already sold.” At Apple Ford in Columbia, SUVs and trucks are still selling, but at a slower pace, said Chip Doetsch III, president and general manager. The dealership sells 23 Escapes, 12 Fusions and 12 Focus’s on average per month. “It’s a one-to-one, car-truck ratio where it was a one-to-four ratio a year ago,” said Doetsch. Car dealers are also seeing more customers opting to trade in their gas guzzling trucks and SUVs for more fuel-efficient cars, said Matthews. “The value has dropped so much in the last month so unfortunately we are not able to make the deals we used to,” he said. A 2008 Dodge Ram truck, which sold new for $34,000, recently got $17,000 at trade-in at his dealership, said Matthews. Many car dealerships are offering special promotions to try to move vehicles faster. Last month, Toyota ran an incentive for trucks. It offered customers up to $4,000 cash back or zero percent financing for 60 months on the purchase of a Tundra, up to $2,000 cash back or zero percent for 60 months on Sequoias and $750 cash back on Highlanders. Chrysler, Jeep and Dodge dealers are offering “Let’s Refuel America,” a $2.99 gas guarantee program, where customers lock in their gas price for three years and up to 36,000 miles. Buyers receive a gas card that enables them to buy fuel at the discounted rate. The program began May 7 and is available through July 7 on compact cars, SUVs, sedans, minivans and pickup trucks. “Since ‘Let’s Refuel America’ I’ve seen more SUVs selling because people are locked into that $2.99 guarantee and feel better about making the purchase,” said Ray Contee, sales manager at Darcars Chrysler Jeep Dodge of New Carrollton. Currently, the Dodge Caliber, Jeep Patriot and PT Cruiser are in high demand, said Contee. He sells five to 15 SUVs and trucks a week — a drop of at least 10 vehicles a month from before the gas spike. “Even with gas prices so high our top selling vehicles are the Dodge Charger and Chrysler 400, which both have V-6 engines,” said Contee. “People aren’t yet sacrificing the car room and features because of high gas.” “By the end of the year I’m hoping to see an up-tick because there’s pent up demand out there but right now there’s more uncertainty about gas prices and where they are going,” said Kitzmiller.
