Used-car sales ramp up

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PITTSFIELD -- With production disruptions still plaguing some Japanese manufacturers following January's earthquake, automotive sales in Berkshire County are tilting toward used vehicles, which are gaining in value, as well as American-made models.

At Haddad Toyota, the normal late-spring inventory of about 170 new cars is down to 120, said General Sales Manager Joe Scibelli.

"We are running short," he said, "but we'll stay aggressive with pricing and if we run out, we run out."

Noting reports that many dealers nationwide are raising prices on models in scarce supply, Scibelli asserted that Haddad is not following suit even though the popular Corollas, Camrys and RAV4s are hard to come by.

At the same time, Scibelli noted a surge in used-vehicle sales. He said Haddad's three dealerships, including Subaru and Hyundai, have 300 used vehicles on their lots, including up to 90 "certified" Toyotas. Hyundai and Subaru new-model inventories are near normal.

At K-M Motor Sales in North Adams, the second-oldest Toyota dealership in New England, owner Dennis Dubie has seen a 40 percent drop in availability: Normally, he has 70 to 75 new vehicles on the lot for spring sales, but currently he's down to 38.

"That's our biggest problem, we can't get the cars," he said. Dubie said he has been assured that full production is resuming in Japan by July, with normal inventories returning to his lot by early fall.

Unlike other dealers, Dubie hasn't been swamped with used-car customers; since pre-owned prices keep rising, people are holding on to their vehicles until supplies of new models return to normal.

At Johnson Dealerships Inc., Chairman Gary Johnson said his stock of Fords and Nissans is a "little bit short," with the new 2012 Ford Focus models especially in demand because of their high gas mileage.

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"They come in and go right out," said Johnson. He noted that recent tight supplies of four-wheel drive Fords have now eased, while Nissan inventories are normal except for the sporty "Z" model.

Lower total vehicle production during the last several recession years -- from an annual average of 18 million to about 12 million -- has cut the number of recent used models traded in, so prices are up for sellers as well as buyers. "The price difference between new and recent, clean used vehicles is narrowing," said Johnson.

"We have to chase around," he added, "with a lot of swapping to and from other dealers in the region."

Johnson said manufacturers have cut back on discounts, but during the upcoming Memorial Day holiday period, zero percent financing deals will be pushed. Combined with already-low interest rates for financing and leasing, Johnson says buyers are in the driver's seat, especially those with used vehicles to trade.

For Rick King, owner of McAndrews-King Buick GMC Truck in Adams, "the used-car market is the strongest I've seen in my 38 years in the business." He said that while the new models he sells are in strong supply, there's a shortage of recent-vintage used vehicles, driving prices up.

With seven different brands in one complex along Route 8 in Cheshire, Bedard Bros. is steering some customers to its Chevrolet, Dodge and Chrysler-Jeep showrooms. It also offers Volvos and Suzukis.

"Our Honda inventory is pretty low," said owner Brian Bedard. "May was our worst month ever [for supply], but we should be rebounding in June. Everything has been hampered because of the lack of production parts."

Despite the shortages, Bedard said, Honda has maintained its incentives, low-financing offers and special lease rates.

The recent runup in gas prices, now easing slightly, did not spark a rush to hybrids, Bedard said, unlike two years ago when prices peaked at $4.08 per gallon in the area. The reason, he and other dealers agreed, is that nearly all current vehicles are rated at higher gas mileage averages than in the past. He said that overall business activity at his dealership has increased sharply this year because of pent-up demand and "a little more optimism about the economy."


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