Car dealers collapse as sales drive off a cliff

| Print |  Email
Archives - December 2008
Monday, December 01, 2008

CarDealers Hundreds of car dealerships across Oregon are closing their doors because of slumping demand.

STATEWIDE At first glance, the car lot in outer Southeast Portland looks like all the others nearby, plentifully stocked with “Dealer’s Specials” and “Fresh Start Financing” deals. But while the merchandise is still on display, the business is history, or at least in hibernation.

Thirteen car lots within two miles of this shuttered business have canceled their licenses in 2008, according to Department of Motor Vehicle records. Across Oregon, 270 dealerships have gone under or on hiatus over the past year.

Sky-high gas prices followed by a severe slump in consumer confidence have sent new car sales to their lowest level since World War II. While it is harder to track used car sales in the “EZ Financing” side of town, the same fundamentals apply, and the blight is spreading. Just down the street, another lonely herd of oversized SUVs lies out of reach behind a padlocked chain-link gate.

Used-car lots aren’t the only ones taking a hit. Oregon’s largest auto dealer and third-largest public company, Medford-based Lithia Motors, is losing money and attempting to trim 29 stores from its 13-state empire. Its stock has sunk 75% over the past year.

Major new-car dealerships from Brookings Harbor Ford on the southern coast to Dick Hannah Ford near the Rose Garden in Portland have closed, and more are expected to follow as the recession deepens. One of the state’s oldest dealerships, Gibson Motor Company, which sold Model T Fords when it opened in 1921, closed in November in Junction City. Motor vehicle employment in Oregon is down 14.5%, or 4,000 jobs, from a year ago.

Greg Remensperger, executive vice president of the Oregon Auto Dealers Association, says sales are down 30%. “People who have been in the business for 30, 40 years are saying they’ve never seen anything like this,” he says.

The dealers association has been running ads arguing that it is a great time to buy because financing is available and prices have dropped. The Kelly Blue Book, the benchmark standard for auto pricing has devalued suggested prices an unprecedented six times over the past four months.

“The minute we see one or two rays of sunshine there will be a pent-up bunch of people ready to go out and buy a car,” Remensperger says. Until then dealerships will be “hunkering down to make it through.”                                                         

BEN JACKLET


Have an opinion? E-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

 

 

More Articles

5 questions for Flywheel CEO Rakesh Mathur

The Latest
Wednesday, April 29, 2015
FW splashBY JACOB PALMER | DIGITAL NEWS EDITOR

Portland is awash in rideshare options. We ask the head of Flywheel what sets his app apart.


Read more...

Can small be large?

Linda Baker
Wednesday, April 01, 2015
040115-lindablogthumbBY LINDA BAKER

Leaders in Oregon's ag sector gathered this morning in Portland’s Coopers Hall winery/taproom to discuss the role of the region as an export gateway, impediments to exporting products and solutions to containerized shipping challenges.


Read more...

Energy Stream

May 2015
Monday, April 27, 2015
BY LINDA BAKER

Oregon already ranks as the nation’s second largest generator of hydroelectric power. (Washington is No. 1). Now an elegant new installation in Portland is putting an unconventional, sharing economy twist on this age-old water-energy pairing. The new system, launched this winter, uses the flow of water inside city water pipes to spin four turbines that produce electricity for Portland General Electric customers. 


Read more...

Shades of Gray

May 2015
Monday, April 27, 2015
BY KIM MOORE

Are we too quick to diagnose corruption?


Read more...

The ancient fish that stops bullets

The Latest
Friday, May 08, 2015
hagfishthumbBY CHRIS NOBLE | PHOTOS BY JASON E. KAPLAN

Hagfish may not have evolved much over the last 300 million years, but their protein-heavy slime promises advances in super-materials.


Read more...

The Health Guru

May 2015
Monday, April 27, 2015
BY LINDA BAKER

Mohan Nair channels a visionary.


Read more...

The Road to Reinvention

April 2015
Friday, March 27, 2015
BY AMY MILSHTEIN

Damian Smith bets on changing himself — and Portland — through consulting.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS