Stuck in Reverse : Top County Dealers Are Selling Fewer Cars, Making Fewer Repairs

Orange County residents spent fewer dollars on cars last year than in 1990, and what they did spend went for brand-new rather than used vehicles. And there was a dramatic drop in spending for maintenance and repair.

That is the word from Auto Age magazine, which ranks the nation’s top 500 dealerships each year and breaks out each dealer’s revenue from sales of new and used cars, financing and repairs.

“People would come in to have their brakes repaired, and we’d point out that dent in their rear quarter panel, but they’d say, ‘Just fix the brakes, please,’ ” said John Campbell, owner of Campbell Ford in Garden Grove, which is among this year’s top 500.

Gart Sutton, who owns a Newport Beach consulting business that advises car dealers, suggested that “maintaining our cars is just not as much of a priority as maintaining the status of having a nice Mercedes or a Lexus.”

Indeed, one local luxury-car dealer, House of Imports Mercedes in Newport Beach, was in the top five in the nation, as it has been in 1990. It has been among the top 20 every year since Auto Age began compiling the list in 1987.

The report shows that the local mix of dealerships is changing. Two years ago, when the 1989 list was published, it included nine Orange County dealers selling American cars, three selling Japanese cars and three selling European cars. This year, there are five dealers in American cars, six in Japanese and two in European.

The sales figures include light trucks and vans as well as cars.

The number of new cars sold in Orange County fell by an average of 161 per company among the top 500 dealerships, according to the figures the dealers reported for publication in Auto Age’s June issue. That compared with 250 per dealer for the rest of the national leaders.

Overall, the 13 Orange County dealerships that made the list showed a drop in total revenue of 3.3% to $747.4 million. That compared with a 4.7% drop in revenue among the 500, to $24.7 billion.

At first, that looks like a good sign for the county’s economy. However, the latest list has the names of five fewer Orange County dealerships than the previous year, when 18 were included.

Those that made the cut for last year’s report but missed the $32.8-million cutoff this year were Ted Jones Ford in Buena Park, Sunset Ford in Westminster, Guaranty Chevrolet in Santa Ana, Newport Imports Jaguar in Newport Beach and the former Jim Slemons Mercedes, which changed hands after filing for bankruptcy protection last year.

Newport Imports reported earlier this year that its monthly sales were off by 40% since December, 1990. The dealership attributed the decline to the weak economy as well as to the new 10% federal luxury tax on vehicles costing more than $30,000.

Another luxury-car dealer, Crevier BMW in Santa Ana, also witnessed a sharp decline in sales, from $50.7 million for 1990 to $38.9 million for 1991. A Crevier spokesman would not comment on the latest report.

Consultant Sutton said he thinks the luxury tax affected BMW sales but that Mercedes dealers were less affected because they have a strong leasing program. In uncertain economic times, he said, consumers seek the limited commitment of leasing a vehicle rather than taking on years of car payments.

The number of used cars sold by Orange County’s top dealers in 1991 fell by 10.2%, or an average of 81 at each dealership. That compares with a rise of 59 per dealer among the Auto Age 500.

Dealers and consultants were split on what the resale figures might mean. One suggested that the people who typically buy used cars are in blue-collar occupations that have been hurt by layoffs.

O.C.’s Top Car Dealers

Of the 500 biggest dealerships in the nation, 13 are in Orange County. The listing by Auto Age magazine suggests that the county’s car-buying public prefers foreign cars to domestic models, and new to used.

Dealing From the Top

Orange County’s nationally ranked dealerships make two-thirds of their money from the sale of new cars. Nearly three-fourths of the cars they sell are new:

REVENUE SOURCES

(In millions of dollars)

New cars: $498.7, 66.7%

Used cars: $125.5, 16.8%

Parts, service: $95.3, 12.7%

Financing: $16.2, 2.2%

Body shop: $12.0, 1.6%

BUYING NEW

New cars sold: 25,946, 71.5%

Used cars sold: 10,351, 28.5%

NATIONAL RANKINGS

A baker’s dozen Orange County auto dealers are in the national ranking; of those, nearly half are in the top 100.

Dealership, City 1990 rank 1991 rank House of Imports Mercedes, Buena Park 4 5 Toyota of Orange, Orange 23 23 Toyota of Garden Grove, Garden Grove 195 52 Elmore Toyota, Westminster 69 59 Villa Ford, Orange 167 75 Tuttle-Click Ford, Irvine 77 93 Tustin Lexus, Tustin 180 155 Penske Honda, Westminster 225 211 Lew Webb’s Irvine Toyota, Irvine 429 225 Campbell Ford, Garden Grove 190 311 Crevier BMW, Santa Ana 188 360 Connell Chevrolet, Costa Mesa 294 472 Lew Webb’s Irvine Nissan, Irvine 499 484

NEW VS. USED

House of Imports Mercedes in Buena Park was the county’s No. 1 money-maker last year, with $120.1 million in total revenue. However, of the 13 ranked dealerships, it was eighth in the total number of cars sold:

New Used Dealership Cars Cars Total Toyota of Orange 3,704 2,082 5,786 Toyota of Garden Grove 3,252 1,443 4,695 Elmore Toyota 3,170 1,292 4,462 Villa Ford 2,948 820 3,768 Penske Honda 2,506 844 3,350 Tuttle-Click Ford 2,182 734 2,916 Lew Webb’s Irvine Toyota 1,780 502 2,282 House of Imports Mercedes 1,432 814 2,246 Campbell Ford 1,661 536 2,197 Lew Webb’s Irvine Nissan 1,453 412 1,865 Tustin Lexus 1,104 538 1,642 Crevier BMW 754 334 1,088 Connell Chevrolet N/A N/A N/A

Source: Auto Age magazine