Auto, truck sales run out of gas in October

By Alex Gary

BusinessRockford.com

Rock River Valley auto and truck dealers had been holding their own in 2008, with sales bumping along near or sometimes even above 2007 levels.

Then came October.

For those wondering how Detroit’s automakers — Ford, General Motors and Chrysler LLC — could slide so precipitously that they needed to beg for federal loans to survive the winter, a look at the number of cars registered after purchase will provide the answer.

In October, in Boone, Ogle, Stephenson and Winnebago counties, residents registered 4,885 cars, trucks and SUVs after purchase. That was nearly 18 percent below September’s level and nearly 19 percent below October 2007’s total.

The falloff was most dramatic in new vehicle sales, with 699 being registered in October, a more than 40 percent fall from last October. In fact, the Register Star has vehicle registration data back to 2005, and the second-worst month was January 2005, when 929 new vehicles were registered after purchase.

“It’s been a real challenge to find anyone willing to take on a new payment,” said Dean Zimmerman, general manager of Strandquist Chrysler in Rockford, which also sells used vehicles. “I’d be interested to see what the price mix was of the used cars. We are having trouble finding buyers for anything priced above $10,000.”

Tough times for auto dealers affect more than just the salesmen. Cities suffer as well. Rockford collected $4.3 million in tax revenue from its automotive and filling station sales last year, about 17 percent of the $24.7 million overall in its take from sales taxes.

In Loves Park, automotive sales accounted for $1.25 million of its $4.1 million revenue from sales taxes, or more than 29 percent.

State officials who collect the car registration data warned that November registrations appear to be even worse.

Reach Assistant Business Editor Alex Gary at agary@rrstar.com or 815-987-1339.

What it means
Car sales registrations are a good, if imperfect, barometer of auto sales.

They measure the number of cars and trucks registered in a county after the purchase, not where they were bought.

So if someone bought a new Dodge Caliber from Bryden Motors in Beloit, Wis., and registered it in Boone County, it would show up as an Illinois registration.

Still, most people buy in their home county, so it’s a good indicator of the industry’s overall strength.

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