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Auto Shoppers Brake for Gas Prices

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Times Staff Writers

This Labor Day had a special meaning for David Lira: He pictured himself possibly laboring more in the months ahead.

After inspecting a new gunmetal Hummer at a Cerritos dealership Monday, he considered the higher fuel costs he’d have to pay if he traded his aging coupe for the monster ride on the lot.

For the record:

12:00 a.m. Sept. 7, 2005 For The Record
Los Angeles Times Wednesday September 07, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 40 words Type of Material: Correction
Auto sales -- An article about Labor Day auto sales in Tuesday’s Business section said prices on 2005 Dodge Ram pickups had been reduced as part of General Motors Corp.’s discount program. Dodge is a brand of DaimlerChrysler, not GM.

“You have to work harder,” he said, before heading to a BMW dealership. “You have to keep living.”

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Lira was shopping at a moment of uncertainty, as the nation’s gasoline prices soared to record levels over the weekend, an average of $3.057 for regular, after Hurricane Katrina knocked out nine oil refineries on the Gulf Coast. That was up more than 75 cents from last month and $1.20 a gallon above the average on Labor Day a year ago, according to the Oil Price Information Service.

Labor Day weekend is traditionally a busy period for car dealers as they discount older models and lure buyers searching for next year’s big thing. But many industry observers predicted a drop this September after deep discounts on most American cars reduced the 2005 inventory in June, July and August. Rising gas prices have also put many potential customers on the fence, uncertain whether the increases will be permanent and whether the time is right to make a purchase.

“It’s been kind of a tough weekend,” said Ron Wells, sales manager of Puente Hills Pontiac Buick GMC. “I thought we’d move at least over 60 cars and we’ve only sold 41 or 42 so far. I don’t know what’s going on.”

Wells had hoped that deep price cuts advertised on the GMC Yukon sport utility vehicle would bring in customers who might buy something more expensive, he said, “but not as many people as we expected are coming in.”

It was a similar story at Nabers Pontiac GMC Buick Cadillac in Costa Mesa.

“We sold 45 cars last Labor Day weekend,” said sales manager Bob Alvarez. “This weekend we’ve only sold about 29 so far.”

Nationwide, after two months of strong sales, auto purchases slowed dramatically in August as diminishing inventories and rising fuel prices trumped the discount prices offered by American manufacturers. Katrina’s effect on oil prices and auto sales is expected to be felt for most of the rest of the year.

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Gas prices were very much on the mind of Silvio Fama on Monday as the Anaheim tile and marble installer examined a shiny red Nissan Nismo 4X2 pickup at a Cerritos dealership.

“I’m looking for a small truck for work,” he said. “Mileage matters a lot.”

That kind of calculation apparently helped put a crimp in business at Airport Marina Ford, sales manager John Felix said.

“I’m really surprised, because usually Labor Day weekend is a big time for us,” he said. “But with gas prices and everything, people are staying away. I expected that we would have sold 35 cars by now, but we’ve only moved 26. People keep complaining about gas prices.”

Complaining, yes, but it doesn’t mean they won’t buy gas-thirsty vehicles, said Todd McNitt, general sales manager at Cerritos Dodge. With prices for 2005 Ram pickups reduced about $10,000 as part of General Motors Corp.’s discount program, buyers calculate that they can buy a lot of fuel with the savings if they really want the truck.

“Do you want to save $10,000 right now,” he said, or wait years to accumulate that amount in savings from a high-gas-mileage vehicle?

The fact is, he said, folks keep buying big vehicles, despite grousing about the spinning digits at the pump.

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Hummer buyers, it seems, are different.

“People who buy Hummers, they don’t give a damn about gas prices,” said Robert Shahbazian, a salesman at Team Automotive of Pasadena. “They don’t even ask about the mileage Hummers get.”

The answer, in case they ever do ask, is about 10 to 12 miles per gallon.

“If people are worried about gas mileage, they are definitely at the wrong dealership,” added Hummer sales manager David Madrigal of Parkway Supercenter in Valencia, who said the Hummer’s appeal was its presence and status.

“If they are spending $50,000 or $60,000 on a vehicle,” he said, “another $10 to fill up the tank doesn’t make a difference.”

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