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Local Car Dealerships Weather Auto Industry Crisis
Chrysler Announces Plant Closure, Big Automakers Post Dramatic Drops
UPDATED: 12:34 pm CDT July 2,
2008
MADISON, Wis. -- Local auto dealers are riding out the auto industry storm, some better than others.
VIDEO: Watch The ReportOn Tuesday, Chrysler announced it would close a St. Louis plant that manufactures minivans and cut one shift from another St. Louis plant that makes pick up trucks.The news came on the same day the auto industry posted significant nationwide drops in June sales.Blaming a bad economy and skyrocketing fuel costs, America's biggest automakers fell in June. GM saw sales drop 18.2 percent, Toyota fell 21.4 percent and Chrysler posted a 36 percent decline in June."It's an interesting time in the car business," said Smart Motors general manager Allen Foster. "This has been my profession for over 20 years and this is probably one of the most interesting times that we've seen. It's such a sudden switch of what consumers want. A couple of years ago the full-sized SUVs, you couldn't get enough of them, now we're seeing the smaller cars."Foster said fuel-efficiency is the driving factor with buyers."Fortunately for us, we weren't really that dependent on large vehicles," said Foster. "We never really sold a lot of SUVs or trucks. We've always been real strong in cars."And despite a nationwide decline in Toyota sales, Smart Motors saw their sales jump 10 percent last month.Foster credits the company's history with meeting the needs of Madison's green lifestyle with also helping them weather this auto crisis."That's positioned us from the beginning to be in the perfect position for this particular fuel crunch," said Foster."It's a tough market, it's a tough economy, there's a lot going on," said Tom Thorstad. "People are concerned about the housing crisis. They're concerned about gas prices. We're coming off record years where we really did sell more cars than we ever have before. There is going to be a lull after such an event."At Thorstad Chevrolet, owner Tom Thorstad told WISC-TV that surviving the auto crisis means re-thinking a business strategy."It changes everything, in any business you want to tailor to where your strengths are," said Thorstad. "For us, if new car sales are slow you focus on used cars, you focus on service."Thorstad said his business is definitely booming in the service department."If they're not buying cars, they are going to be spending more fixing their cars," said Thorstad. "So you want to make sure your training is up to date and that all of your services, all of the processes are going well and that you're responding to the needs that the market expresses, not the needs you wish the market had."Right now, Thorstad said used car sales are double their newer counterparts.And, he said while truck sales are down, there is still a need for them and his dealership is ready to meet that need."A farmer is not going to be able to work their field in a Geo Metro, and a painter is not going to be able to put a 20-foot ladder on a moped," said Thorstad.He said weathering the storm includes keeping a closer eye on everything."You watch your expenses real close and make sure your advertising is tailored and has the best chance at measured effectiveness," said Thorstad.Then, he said he has to watch and wait."You wait for it to turn around and seize the opportunities that are out there that this market creates," he said. "There's always an opportunity."
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