Selling Autos
Car sales are expected to downshift to 9.9 million units this year, compared to 10.5 million last year, because consumer spending is exhausted after several strong years for the auto industry, analysts say.
In the first six months of the year, car sales fell 7.6% compared to the 1988 period. Truck sales dipped 5.3%.
Sales were last this slow during the slump of 1982-83, said Christopher Cedergren, an analyst with J. D. Power & Associates, an automotive market research firm in Agoura Hills.
“It really isn’t that bad” in terms of total sales, he said. “What exacerbates it is the competition. There is a lot more inventory out there chasing a lot fewer buyers.”
Ask Lou Miller, owner of the Mazda, Nissan and Subaru dealerships in Culver City. “Seventy percent of the dealers are in the red,” he said.
Sales at his Mazda dealership have been boosted by the hot Miata, Miller said, but “sales are worse at Nissan than they were at this time last year. Sales at Subaru are up, but not significantly.”
Profit margins are not large, particularly when compared to many other industries, he said. “If someone buys a car for $20,000, the dealer makes only $2,000.”
Every industry has its own language to describe its activities, and auto sales is no different. A few of the terms:
* Hole in the roof--a sunroof.
* Greenpea--a salesman with very little experience.
* Broomed--giving the brushoff, as in, “That salesman really broomed that customer.”
* T.O.--stands for “turnover,” or a salesman who greets the customer and does some preliminary dickering but turns the deal over to someone else for the final negotiating and close. Often a pejorative term.
* Up--salesman’s term for a customer, as in “how many ups have you had today?” Often a pejorative term.
* Lookie-loo--a browser, not a buyer. Particularly abundant on Sunday afternoons. Also found in the real estate industry. Usually a pejorative term.
* Moocher--a buyer intent on negotiating all the profit out of a car. Definitely a pejorative term.
Women buy slightly more than 40% of the cars sold today and influence nearly 90% of car purchase decisions, dealers estimate. But few of those who sell cars are women.
“It would be optimistic to say that 10% of the sales force nationwide are women,” said John J. Ferron, a partner at J. D. Power & Associates.
“I think it’s going to increase,” Ferron said. “I know that the number of women managers is increasing and I know that the number of women dealers is increasing and that may be the vanguard.”
Ferron said women may be intimidated by the product or the male-club atmosphere in many dealerships. Dealers report that women also resist the long and irregular hours that salespeople must work, he said.
Sophia Lentini said she had always wanted to sell cars but no one in Youngstown, Ohio, where she was living, would hire her. So she left a job selling insurance and headed west. She was hired last December at Jack Ellis Glendale Dodge.
Many of her customers are women who often tell her they appreciate buying from a woman, Lentini said.
“I’ve heard a lot of women say that I have more patience maybe than a man,” Lentini said. “I don’t pressure them.”
Total employment at automobile dealerships rose to 920,000 in 1988, according to the National Automobile Dealers Assn. That represents a 23% increase from 1983.
The average dealer employed 36 people in 1988, with an annual payroll of $919,000. The payroll of all auto dealers was $23.2 billion that year, representing 12.6% of the nation’s retail trade payroll, NADA said.
The number of dealers is shrinking because of increased competition, rising costs and falling profits, a recent study by J. D. Power & Associates said.
By 1995, the number of retail auto dealerships will drop to 20,000 from the current 25,000. The number of dealership owners will decline to 12,000 from 16,300 now, the study said.
In the year 2000, 8,000 dealer/owners will have 18,000 outlets. In the late 1940s, there were 47,500 dealerships and most were independently owned.
