KNAU and Arizona News
9:03 am
Fri February 27, 2009

Auto Sales

Flagstaff/Prescott, AZ – It's a quiet afternoon at the Prescott Honda Dealership with a few customers looking at cars. The dealership is still located on Iron Springs road One of the owners, Gary Young, says he's glad they didn't move forward with plans to build a new facility because he says Prescott is feeling the recession.

Gary Young) "We have a lot of retired people. And a lot of the retired people had their money invested in the stock market and I think that has a lot to do with our sales. Because our average sales are probably somewhere 60% 55 years and older."

) Young hopes business picks up by the summer but he thinks it may be 2 years before sales become strong and during that time he predicts many of the smaller car dealerships will close their doors.

In Prescott, since July, car sales have averaged 11.5 million dollars a month, down about 5 million from the previous fiscal year. Last month, automobiles accounted for about 7 percent of sales in Prescott. Revenues have been down 13 of the past 14 months . The same as Flagstaff.

Both Prescott and Flagstaff Honda are supporters of KNAU. But unlike the Prescott dealership .Flagstaff Honda did move into a new facility .. at the auto park in east Flagstaff near the mall.


As I admire a Royal blue 2 door Civic on the showroom floor, Salesman Jim Harris points out attributes.
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But sales at this dealership are down about 25 to 30 percent. General Manager Blane Seley says the last quarter of 2008 was especially tough because traffic was down and it was difficult to get the type of fuel efficient cars people wanted.

Blane Seley "Going forward to January of 09, we actually saw a little bit of an increase after that very poor end to 2008. and 2009 saw some promise with a lot of used vehicles coming around, and people in the market for 4 wheel drive, maybe the 10,000 dollar kind of car.

TB) Seley says their state of the art facility should drive traffic to his dealership and the 3 others located at the new auto park. The city invested 10 million dollars for infrastructure at the mall expansion which includes the auto park.

Becky Daggett who is Flagstaff's Business Retention and Expansion Manager says she shares optimism of the dealers who have relocated at the mall.

Becky "The economy being what it is, of course, I think every industry across the board has seen reason for concern but I think the synergy that I think happens with the auto dealers being there in one place is going to help them, at least that's what everyone's hoping for."

City officials are also exploring a local stimulus in the form of a tax break. Consumers who buy a car which gets at least 30 miles to the gallon, would be eligible for a 1-percent reduction in sales tax. City Manager Kevin Burke the so called tax holiday would be good for 2 reasons.

"One is that we continue to see auto retail really really drop. Year over year we're down almost 45%. So, 2 is that, any little incentive that we can help to get that going. And then that multiplier effect cause where we also collect sales tax is on the service and repairs and things of that nature."

Flagstaff Honda's Blane Seley thinks the tax incentive would be good for his business, enticing people want a fuel efficient car but are on the fence.

"It will get them to buy. I think if you're looking at the millions of dollars in inventory in Flagstaff Arizona, you're talking maybe 10 20 percent that would fit into that fuel efficient. I think it would be a big boost to our industry if we go that route."

Seley says Honda has a new car coming out in April, a hybrid called the Insight' costing less than 20 thousand dollars, getting up to 50 miles per gallon, and possibly boosting Flagstaff's auto sales .which for the first half of this fiscal year came it at 63 million dollars .down from 100 million 2 years ago. For Arizona Public Radio, I'm Theresa Bierer