U.S. Car Sales Pop a Wheelie : Dealers Having a Hard Time Meeting Demand
Dee Ferkula couldn’t believe it. For years, she had heard how car dealers were hurting. Almost desperate to make a deal. But it wasn’t a buyer’s market that Ferkula found when she walked into her local Jeep dealer’s showroom seven weeks ago to buy a new Cherokee.
Instead of falling all over himself to put her-- “Right now! Today!’ ‘--into one of several dozen models on the lot, the salesman told her she would have to wait to get the one she wanted.
The popular sport utility vehicle is one of about half a dozen models in hot demand this spring, forcing some dealers to do something they haven’t done much of in years: write up so-called retail orders for factory production of cars for customers who want particular color or equipment combinations that just can’t be found in area showrooms.
Most of these spot shortages involve domestic brands, which have gained in popularity in the past year. New models from Detroit have hit showrooms accompanied by news reports of increasing quality.
“I feel like a Honda dealer,” Huntington Beach Jeep-Eagle co-owner Rick Evans quipped, referring to the popularity and sales pace of the big Japanese auto maker’s products in the United States during the mid-1980s. “We’re not used to this. But I guess if you hang on long enough, your time will come.”
The hottest models include top-of-the-line Ford Explorers, Mustangs with Ford’s super-premium sound system, any Chevrolet Suburban or full-size K-5 Blazer, six-speed Camaro convertibles and Jeep Cherokees and Grand Cherokees.
Perri Selman, spokeswoman for Selman Chevrolet in Orange, said the dealership delivers 15 to 20 Suburbans a month and most are sold in advance--ordered by customers who are willing to wait up to 12 weeks to get the color and equipment combination they want.
“We got a batch in last month and only six weren’t pre-sold,” she said. “But all six of them were gone within two days. I’ve only got one out on the lot right now.”
The new popularity of domestic brands has also been exacerbated by the fact that auto makers closed plants and reduced production when American brands were less popular, said Frank McClure, general manager of Center Jeep Eagle in Van Nuys.
Auto makers “are working on improvement,” McClure said. “But they just didn’t have the capacity for building when the pent-up demand broke loose.”
One reason for the shortage in California is that Chevrolet--like several other domestic and foreign car makers--supplies dealers on a so-called turn-and-earn basis: Cars are allotted based on the dealership’s recent sales performance.
Because California’s economy has suffered for four years, many dealers in the state are losing allotments to dealerships in the Midwest and East, where economic recovery began more than a year ago.
Gary Gray, owner of Orange Coast Jeep-Eagle in Costa Mesa-- where Ferkula bought her car--said the distance from California to Detroit also contributes to shortages: It takes 15 days for Gray to receive a shipment of cars once he “earns” them by selling out a previous shipment. A Jeep dealer in Detroit or Kansas City, in contrast, can turn around a shipment in three or four days.
“I couldn’t believe it when they told me how long it would be,” said Ferkula, a senior loan officer with a community bank in Orange. She’ll get her V-6 Grand Cherokee with factory-tinted windows and an overhead console nine weeks after she first walked onto the lot.
Ford buyers are in better shape because Ford Motor Co. began recovering before its competitors from Detroit’s doldrums and has cranked up production of its most popular models in recent years.
But the factory still consistently fails to meet Southern California dealers’ needs for certain Explorer and Mustang models, said Theodore Robins Jr., president of Theodore Robins Ford in Costa Mesa.
“I don’t know if I can even get (a Ford Explorer), to be honest,” said Jay Rosen, sales manager at Santa Monica Ford in Santa Monica. “And if I could, it would be at least eight weeks.”
At General Motors Corp.’s resurgent Buick division, dealers are reporting spot shortages of several models.
Buick shut down several plants for four months last year to provide extra production space for Chevrolet’s redesigned Lumina. Now Buick dealers have a hard time finding Park Avenues and Regals, said Don Partch, manager of Nabers Cadillac-Buick in Costa Mesa.
And Irvine-based Mazda Motor of America thought its dealers would sell only 800 of the company’s new Japanese-built Millenia luxury car in March, the first month it was offered. Instead, Mazda dealers moved 1,900 of the $25,000 to $35,000 sedans in March and 800 in April.
Unlike the early 1990s, when Southern California showrooms were overflowing with unsold cars, dealers who run out of one of today’s hot models can’t even help customers by trading with a fellow dealer who has one.
“If somebody wants a Suburban and we don’t have one, chances are nobody else will, either,” Selman said.
Hot Cars
Some automobile models have vastly increased in popularity this year--with sales to date significantly outpacing the 1993 rate--forcing some customers to wait for the car they want.
Sales, in thousands: Jeep Cherokee 1994 first quarter: 39.97 1993 total sales: 125.44 Ford Explorer 1994 first quarter: 100.99 1993 total sales: 302.20 Jeep Grand Cherokee 1994 first quarter: 80.90 1993 total sales: 217.23 Chevy Blazer 1994 first quarter: 7.55 1993 total sales: 22.85 Chevy Suburban 1994 first quarter: 27.75 1993 total sales: 82.62 Ford Mustang 1994 first quarter: 61.98 1993 total sales: 98.65 Chevy Camaro 1994 first quarter: 42.35 1993 total sales: 68.77
Source: Ward’s Automotive Reports
