New, used vehicle sales down overall in region in ’06

With gasoline prices climbing over the $3 mark during the summer, it’s probably no wonder that vehicle sales in Northern Colorado weren’t exactly overwhelming in 2006.

Sales and use tax reports from the cities of Greeley and Fort Collins show vehicle sales through September were lackluster. While car sales in Fort Collins were up by 10 percent in September over the same month in 2005, year-to-date sales were down by 4.2 percent. “We’ve seen a trend throughout the state that generally overall auto sales are down this year,´ said Jeremy Reese, Fort Collins’ sales tax manager.

That downward trend was also true for the city’s car use tax collections, which were down by 2.6 percent through September, the latest month for which figures were available at press time. Car use taxes are collected on purchases by residents made outside the city limits.

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In Greeley, it was more of a mixed bag. Vehicle sales tax collections were up by 5.15 percent though September but use taxes were down by 3.11 percent. Timothy Nash, Greeley’s finance director, said the difference between the two was puzzling.

“You can draw a number of conclusions: Maybe more people were buying inside the city than outside this year,” he said. “Or, you can say local dealers are making money on additional services or parts. But (the two taxes) usually track more closely.”

Local dealers had mixed reports on 2006 sales. Phil Marzolf, general manager for Ehrlich Motors’ Volkswagen-Nissan dealership in Greeley, said sales for his vehicle lines were up over 2005.

“Our sales have been up through the year,” he said. “Both used and new car sales are up.”

Marzolf said new car sales were up “about 50 percent” while used car sales were up a whopping 250 percent.

“We put more emphasis on used cars and we carry the biggest inventory in Northern Colorado,” he said. “We have probably three times the inventory of a standard dealership.”

Imports bright spot

Marzolf, who handles vehicles from Japan and Germany, said the high gas prices of last summer probably hurt domestic vehicles more than imports. “People were looking for affordable gas mileage vehicles and imports generally have that,” he said.

The gas crunch also hurt the sale of big trucks, he said. “There was a slowdown in demand when gas prices were high,” Marzolf said, “but people are coming back now and buying again.”

Roger Belisle, general manager for Markley Motors, which sells mostly American-made vehicles, said sales for his company were pretty comparable to 2005.

“They were about the same, maybe off just a skosh, but nothing to get alarmed about,” he said. Part of the reason for that, Belisle noted, was that Markley was coming off a record year in 2005.

One bright spot for the company was sales of Honda imports. “Honda sales were better than last year,” he said. “A lot of people were looking for additional fuel economy.”

He said sales of General Motors and used vehicles held steady in 2006. Belisle said one phenomenon he witnessed in 2006 was purchasers buying smaller, more fuel-efficient vehicles while holding onto bigger SUVs purchased earlier.

“They were buying an additional car to use as a commuter car while keeping their big SUV in the garage,” he said.

Belisle said diesel and hybrid models “weren’t a big part of our sales” but hybrids in particular “are good when we can get them, but we can’t get that many.”

Belisle said he believes local car buyers still focus on their lifestyle when purchasing a vehicle and less on sheer economy. That will likely mean more SUVs and big trucks capable of plowing through deep snow and pulling heavy loads being purchased than tiny hybrids or other high-mileage models, he said.

“I think the average guy on the street still likes to have a nice car,” he said. “I don’t believe many people in our area want to get away from that.”