Local car dealerships thriving amid record sales, steady growth

Local car dealerships thriving amid record sales, steady growth
Allen Meyer, general manager of Dewey Griffin Subaru, stands in a parking lot of brand-new cars. (Emily Hamann | BBJ)

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Filed on 09. Jan, 2017 in Contents, News

By Emily Hamann
The Bellingham Business Journal

After a record-setting year last year, the car sales industry is still on an upswing.

Car sales reached a 15-year high nationally in 2015, according to the Wall Street Journal, as a recovering economy, cheap gas and low interest rates sent Americans out to car lots in droves to buy up new vehicles.

And car dealers could break that record again in 2016, despite the growth spike slowing down around the middle of the year.

Locally, Whatcom County car dealers are also enjoying the trend.

The number of new cars registered in Whatcom County has been rising for the last four years, and hit a peak in October of 2015, according to Department of Licensing records. Since then, the increase in new registrations has slowed down.

Sales at Dewey Griffin Subaru in Bellingham, however, are still rising.

Allen Meyer, general manager and part-owner of Dewey Griffin, said in mid-December that they were on track to beat 2015’s sales numbers.

Meyer said that will make several years of straight growth.

In fact, early this year, the dealership should be opening its brand new building in an attempt to keep up with the rising demand.

Located just behind the current building, where the onsite dog park used to be, the new building is 54,000 square feet — three times bigger than the current space.

It will have a bigger showroom, a bigger service center and more inside space to protect customer from the weather.

Meyer and Subaru have been anticipating the need for a bigger space since around 2010.

“We knew it was coming, just because we kept having more and more customers,” Meyer said.

It got to the point where the lot looked empty because because cars were selling so fast.

“At one point we had three new cars on the lot,” he said. “People would call us up and ask if we were closing.”

The recession didn’t hit Dewey Griffin as hard as it hit other dealerships.

“We never really saw a huge slow down,” Meyer said, “because Subarus, they just were hot then.”

They did see a small slow down, however.

Initially, they tried to bring in more customers by ramping up advertising, but eventually ended up cutting the ad budget almost completely.

Even though business has been good for several years now, the dealership is still not advertising in newspapers and magazines as much as it was pre-recession.

There are other lessons learned during those years that are still being put to use.

“We’re much leaner,” Meyer said. “We don’t have a lot of cars just hanging out.”

That’s especially true for how they manage their used cars — Meyer said they only have about a third of the number of used cars that they used to.

That’s partly because it’s more efficient to only buy the cars they know they can sell.

But also, used cars are harder to come by these days – Meyer said in part because of another recession-era program.

“Back when everything was starting to spin out of control,” he said, “our president started that ‘Cash for Clunkers’ deal.”

In the summer of 2009, drivers could turn in their old, fuel inefficient cars (which were then destroyed) and get a rebate to put toward a new, fuel efficient car.

At the time, Dewey Griffin saw a modest boost in sales, Meyer said, but it took a lot of used cars off the market.

Mike Diehl, general manager of Diehl Ford in Bellingham, has also noticed that used cars are harder to come by.

At his dealership, that has caused pent up demand and pushed prices for used cars up.

Fewer people were buying cars a few years ago, which means fewer people are looking to trade in used cars for a new one now.

In recent years, Ford has been positioning itself away from the rental car fleets, he said.

Normally, that’s a big source of used cars.

Also, he said, used cars are harder to come by in Whatcom County because people drive their old cars longer. In general people here are not as worried about keeping up with their neighbors and getting a brand new car every few years, Diehl said.

“People tend to hold onto their cars a couple years longer than the national average,” Diehl said.

He said he’s also still hanging on to some hard lessons learned during the recession.

“It was good to kind of go through an exercise like that, because we have learned to be a lot leaner,” he said.

During the hardship, Diehl winnowed down his workforce through attrition — they didn’t replace employees who retired or left the company.

Since then, they’ve been able to do more hiring, about half a dozen new employees, a ten percent increase.

Diehl didn’t think his dealership was going to break any records this year.

Sales have begun to flatten out over the last few months, he said, and they probably won’t see the numbers they saw last year.

“Our economy is stable here,” he said. “It’s not growing by leaps and bounds like it is 60 miles south of here.”

But there’s one area where they’re seeing a big increase in sales:

Business and commercial customers are investing in more trucks and vans.

They’re either starting new businesses or expanding existing ones.

That in itself is positive news.

“That’s a great sign,” Diehl said.

“They are confident in the economy.”

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IFRoZSBKb3VybmFsPC9saT48L3VsPg==