AutoNation Store Shuts, Surprising Oxnard Officials
AutoNation USA’s local megastore, which opened a year ago this month, was among 23 used-car dealerships abruptly closed Monday in a massive restructuring at the nationwide auto retailer.
The news surprised Oxnard officials, who say they’ll feel the pain as they face yet another obstacle in reviving the city’s retail district along the Ventura Freeway.
“This is completely out of the blue, and I’m a little perplexed to say the least,” said City Manager Ed Sotelo. “It will definitely hurt.”
AutoNation Inc. is America’s largest automotive retailer, with 409 new-car retail franchises in 19 states in addition to its used-car malls. The company also owns and operates the National, Alamo and CarTemps USA rental car companies, which it plans to spin off under the ANC Rental Corp. name.
Oxnard received an estimated $400,000 in property taxes from the used-car mall this year, according to Mayor Manny Lopez, who has faith the city should be able to fill the 20 acres of space that just a year ago looked to be the future of used-car retailing.
“We have to do some marketing of our own,” he said. “But it’s very prime property, and some user will come along. It may not be another automobile dealer. It may be more than one user.”
But some analysts suggest the AutoNation closure, coupled with the struggling Oxnard Factory Outlet and the limping Esplanade mall, could mean the city has a long, tough road ahead of it.
“This hits them right where it hurts,” said Jack Kyser, chief economist at the Los Angeles Economic Development Corp. “Their regional mall and outlet mall are suffering, and now an auto dealership closes. Who are they going to entice to go into this vacant space?”
AutoNation laid off 1,800 workers nationally, saying that the market is too competitive for its used-car chain, which marketed itself as providing a low-pressure sales environment with high-quality vehicles.
Oxnard’s store didn’t fit into the firm’s plans, which included integrating six of the company’s 37 used-car malls into the more successful new-vehicle franchises.
“There were certain criteria from location to staffing on what it would take for the enterprise to succeed,” said Jim Donahue, a spokesman for the company based in Fort Lauderdale, Fla. “It did not make sense to maintain the store.”
All five of the company’s Southern California used-car stores--including lots in Irvine, Long Beach, Torrance and Rancho Cucamonga--were shut down, and about 450 employees were laid off. As of early Monday night, the company had not informed Oxnard city officials of the closure.
Employees at the Oxnard store learned of the closure about noon and were immediately sent home, according to a security guard brought in by the company Monday. Workers are to receive a month’s severance pay, according to the company spokesman.
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Customers were turned away and a paper sign was taped to the store’s door reading: “This facility has permanently closed.” By afternoon, the only people remaining on the lot were security guards and employees brought in from out of state to handle the closure. All declined comment.
According to Donahue, December is typically when dealerships trim their employee ranks as automobile sales slump in the weeks before Christmas.
“This time of year you’re always out looking for a job,” he said. “People change jobs in this business all the time.”
Although Oxnard officials were surprised to hear of the closure, it came as no shock to others in Ventura County’s auto sales industry.
The used-car market is struggling in this county because good economic times have prompted more people to buy new, according to I.J. Melchior, former president of the Independent Auto Dealers of Ventura County and owner of Afternoon Motors in Ventura.
“They expected too much from this area,” he said. “Anybody who could afford a good used car could make the same deal for a good new car. There’s not enough difference in price.”
Few of AutoNation’s cars in Oxnard were priced at less than $10,000, and most fell between $12,000 and $22,000.
The city will continue to look for retailers to fill the space--a wise choice, argues Kyser, because of the importance of sales tax revenues to municipal coffers.
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Oxnard officials said they will meet in the coming days to form a plan to handle the site. They maintain that while the lost sales tax will hurt, it is by no means a killer.
“We’re not in crisis mode yet,” said Sotelo. “I’m cautious, but usually you have a run of events, and then things stabilize themselves. We’ll get back into it again.”
