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Jim Weis

Car Sales Down But Outlook Optimistic

Colorado Dealers See Signs Of Turnaround

POSTED: 4:52 pm MST November 5, 2009
UPDATED: 9:24 am MST November 6, 2009

Car sales numbers were down again in the third quarter in Colorado, according to a report released by the Colorado Automobile Dealers Association.

Car sales are down over 28 percent so far in 2009 compared to 2008. The decline is seen almost equally between car (26.6 percent) and light truck (29.4 percent) sales.

But Tim Jackson, president of Colorado Automobile Dealers Association, said there is reason to believe things are going to turn around.

"It still is a tough market," Jackson said. "The new car sales continue to be poor compared to previous years. But there are signs for optimism."

Jackson said the better than expected October numbers by some car manufacturers like Ford and General Motors, along with improving economic indicators, have his group predicting a 14 percent sales increase in 2010.

Car dealer John Medved agreed with that assessment. He said after a rough September, his sale numbers were better in October.

"We are seeing increase in our sales really for the first time in 2 1/2 years," Medved said.

Jackson said dealerships have found new ways to supplement their profits. One of the largest growing components of the business is in service, parts and maintenance. He also added the Cash for Clunkers program helped soften the economic blow many dealerships were facing.

"Dealers were able to get rid of some inventory that they were paying higher interest on," he said.

Jackson said Colorado's slide in sales is stiffer than in other parts of the country, even though other economic indicators show the state being spared the brunt of the recession in comparison. He said there is no data to pinpoint why that would be but offered a hypothesis.

"Colorado sees a lot more light truck, SUV and heavy-duty truck sales than other states," he said. "Those vehicles tend to be more expensive than other models."

Medved said he thinks part of the problem was also created by the automobile manufacturers.

"We have missed a couple of buying cycles because of the quality of the vehicles," he said. "We had two trucks come in last week that had over 200,000 miles on them."

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