South Bay car dealerships struggling

December 4, 2008 12:28:20 PM PST
U.S. automakers are suffering because sales are way down; in November sales dropped 37 percent across the country - to their lowest level in more than 26 years. That means, local car dealerships are struggling to stay in business -- with no prospect of a federal bailout on the horizon.

Those grim nationwide figures of plunging auto sales paint the local picture too -- sales are down for everyone - that's what employees are telling ABC7 who work at dealerships of the big-3 domestic automakers on the Capitol Expressway Auto Mall in San Jose. And customers - so far on Thursday, at Ford, Chrysler and GM, were only seen at the service departments.

The sale signs announcing deals are plentiful, but the buyers are few -- car dealers contribute blame to difficulty getting credit, the rise in gas prices earlier this year and lack of consumer confidence.

Dealerships are feeling the economic pinch, with about 70 closing in California so far this year. In the past few years, about a dozen dealerships in the San Jose-area have closed -- most recently Los Gatos Chevrolet, and 35 people lost their jobs there.

At the Carl Chevrolet dealership in San Jose, customers waiting for their cars to be serviced were watching TV coverage of the automakers pleading Congress for a bailout. Both customers and retailers agree a solution is critical.

"I hope that the Chevy dealership, that GM gets bailed out, definitely - you know, for Ford, all of the U.S. companies you know, I think everyone should really focus on in order to save the businesses in the United States, that they need to start buying in the United States - so we can support our own country," said Lisa Veraja, Santa Cruz.

"People will not buy cars from a bankrupt entity. They're afraid to buy cars as it is right now. This is the second largest purchase that they will ever make in their life," said James Fleming, Pres. of Connecticut Automotive Retailers Association.

In Santa Clara County, car sales were down 18.6 percent in the first six months of 2008. The drop in sales not only hurts car dealers, but cities' tax revenues too -- San Jose's tax revenue from new-car sales is down $800,000 just through the first half of the year.

None of the local employees who work at the big-3 dealerships -- GM, Chrysler and Ford-- wanted to go on-camera, but those we spoke said they're closely following the automakers' pitch to Congress for a $34 billion loan rescue package. They hope for a solution, because if not, many more dealerships and jobs could be on the line.


Load Comments