Bucking the trend
Published Wednesday January 7th, 2009
Big Three | Local dealerships say it's not all doom, gloom
Fredericton's Big Three car dealerships say sales are good despite the doom and gloom coming out of the auto industry in the United States and elsewhere in Canada.
"We have just come off a fabulous year," said Bill Johnson of Wood Motors Ford on Prospect Street. "Not counting inflation, this is probably one of the best years we've ever had."
This week, The Daily Gleaner contacted all seven of the local Big Three car dealerships representing General Motors, Ford and Chrysler products. Four agreed to be interviewed.
National statistics released Monday indicated last month was the worst December for Canadian car and truck sales in 13 years, with automakers reporting an average 21 per cent decline year over year.
"We are in a different marketplace than even the rest of Canada," Johnson said about auto sales in the capital.
"In Fredericton, I think the car market is up 20 per cent. But Canada is not bad (either)."
He said few of the people who come through his doors talk about the problems with the Big Three in the United States.
He said Fredericton is almost immune to economic ups and downs because of steady employment offered by the provincial and federal governments, the universities and the military at Canadian Forces Base Gagetown.
"We are (safe) as long as the government doesn't talk about cutbacks with the civil service," said Johnson. "Mr. (Shawn) Graham has mentioned that a few times and that is the only thing that makes me a bit nervous.
"Other than that, there is no reason for Fredericton to have any type of recession at all. I can weather almost anything here."
John Clark, owner of Clark Chevrolet Cadillac on Prospect Street, said he didn't think car sales are up 20 per cent but the market isn't bad.
"Fredericton is pretty insulated from the national picture," he said. "Earnings of average people in Fredericton tend to be a little higher than other cities."
Clark said 40 per cent of the city's workforce works for government.
When the economic crisis developed in the fall, many banks tightened their loans process and that impacted the car business for a while, he said.
"If you've got reasonable credit, there is no problem doing that," said Clark.
He said what's going on in the United States' auto industry comes up occasionally on the showroom floor.
"It hasn't been a huge issue," said Clark.
"There is the odd person who comes in and says, 'What is going on with General Motors and what do you think is going to happen?' "
He said he tells them the government will lend the car companies the money they need to shore up the industry.
Clark also said the big drop in the price of gasoline is helping with truck sales.
"It is not an issue anymore," he said about the price of gasoline. "It has helped in the last three months."
J.J. Kennedy, owner of Summit Dodge Chrysler Jeep on Bishop Drive, said he wasn't disappointed by recent sales.
"I am pleasantly surprised by this market at this point ... through November and December," he said.
In some places in Canada and the United States, auto sales are down a lot, he said.
But Kennedy said the local economy is stable.
"The numbers don't lie," he said.
But Kennedy said people in Fredericton aren't totally immune to bad economic news.
"Yeah, they've got stable jobs, but there are some people with mutual funds or stocks that are taking a hit," he said.
As for the big picture in the industry, Kennedy said his customers have seen Chrysler change hands several times in recent years with limited impact on sales.
People want to be certain their warranties will be honoured, he said.
"I could count on one hand the amount of people that have been spooked off," he said.
Kennedy said there were problems getting bank loans for cars in September when the credit crunch first hit, but that's changing.
"I am seeing a lot more approvals go through," he said.
Aubrey Ward, general manager at O'Leary Pontiac Buick GMC Ltd. on Hanwell Road, said sales have been good.
"It's comparable to last year," he said. "We have pretty steady employment here."
Ward said getting a car loan isn't hard because of the good economy in this area.
"If somebody needs a car, they need a car," he said. "We are not going back to the horse and buggy."
The Daily Gleaner also contacted Fairview Plymouth Chrysler Ltd. on Hanwell Road and Saturn of Fredericton Ltd. on Bishop Drive, but officials there declined to be interviewed.
A call to Riverview Ford Lincoln Sales Ltd. wasn't returned.
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