Wednesday, April 22, 2009

“Green,’ Shiny, and Not Moving: A Report on Local Car Dealers

Kathleen Preece

One of the rules of journalism, particularly as it relates to hard news, is that the writer does not report their story in the first person.

I am breaking rules with this story. I am breaking the rules because the story didn’t unfold the way I had envisioned it unfolding. This should not have been surprising. When conducting research, one never knows for sure how an investigation will unfold. However, in this case, before I even began my assignment, I had the first paragraph written. It went like this:

“There’s a new green bug traveling across Minnesota. And it doesn’t have anything to do with the recent stories about the increasing invasiveness of a shiny beetle, the emerald green ash borer – that invasive bug poised on the state’s borders and ready to destroy Minnesota’s millions of ash trees.

“No,” (my lead paragraph began), “these are different and ‘good’ shiny critters rolling across the state. They are green, fast and arriving in ever-increasing numbers in a frenzy. They are the newest, most economical and – importantly – the most efficient and environmentally friendly cars, and they are being sold by dealers across northern Minnesota.”

Well, guess what. That lead-in won’t work because the dealers across northern Minnesota (well, at least in the Bemidji area) tell me that they are NOT selling many more of the efficient, compact, and environmentally conscious cars than before. In fact, some of them are not selling any cars.

I begin this report with Frank Hickerson. Frank has been in the car business since he was 13 years old; he is now 71 and, as he will tell you, “Just do the math.”

In the setting of a Norman Rockwell painting, Frank leans back in an office chair that likely has accompanied him through those decades of car dealing, his many trophies and certificates earned from his work in auto restoration lining the walls behind him. “Hickersons Quality Used Cars,” on the south side of Bemidji is an eclectic mix of early and late model cars, with a few pickups poking up on the lot that rests along busy State Highway 71.

“What kind of cars are people buying?” I ask him.

“They are not buying,” Frank retorts. He reveals that, if he had not already paid for his shop and inventory, he “could not make it.” Frank reports that sales have been off 50 percent in the last two years.

Frank, who began working in the auto body and sales business alongside his dad, does not blame the housing industry, does not blame skyrocketing medical prices, and does not blame the Administration in Washington for people’s lackluster interest in automobiles. Frank blames gas prices. Period.

“You don’t see the oil industry asking for a bailout,” he points out.

“Our world is built on transportation,” Frank reminds me. “When gas prices went up, car and truck sales went down. The minute the prices at the gas station down the road went down this year, sales went up.”

On the opposite end of the town, Todd Moudry, manager with Bob Lowth Ford, looks out on a lot that borders old Highway 71 north, pointing out that, surprisingly, car to truck sales used to be in a ratio of five to one; “That’s more even now,” he says.

Moudry explains that there are some really interesting and efficient cars available, naming the Ford Fusion as the 2010 hybrid model that will have the greatest fuel economy in its class. Additional incentives include opportunities to write off sales tax when buying new vehicles, as well as an incentive providing tax credits for buying the more efficient hybrids.

However, car-buying habits, as they relate to types of vehicles purchased and types of vehicles traded in have remained the same, Moudry reports. Vehicles are still selling, despite a “dramatic overall drop in sales.” One thing that has changed, he admits, is that people are hanging on to their cars longer and lengthening their trade cycles by three to four years.

Jim Fankhanel’s Chrysler Center is situated both geographically and in sales philosophy in between Tom Moudry’s Ford lot and Frank Hickerson’s new and used mix. Fankhanel, who also handles the area’s Honda of Bemidji dealership, sees small cars continuing to move off his lot, with pickup sales having experienced the “best start” in a number of years.

“We are selling new and used trucks, as well as keeping a steady flow of Hondas moving. Last May and June we sold every small car we could get our hands on,” Jim reports.

Fankhanel suggests that a dramatic change in buying habits with an eye toward ‘the green,’ may not be as evident as most would expect. As he explains, most of the late models – both truck and car – are increasingly more economical to run and all must meet more stringent emission standards than in years past. People do not need to be as concerned about the ‘greenness’ of the vehicles they are purchasing because manufacturers are producing ever-increasing efficient models that put less of an imprint on the environment.

If there are any changes, he suggests it is that people are trading in their bigger cars.

The biggest problems to car sales, according to Fanhanel, is the media’s attention to the woeful state of the economy. He contends that if news reports would quit casting doom and gloom, people would, indeed, tend to do “business as usual” and reports such as mine would not be necessary.

Russ Jackson does not have to be asked to put a bright ending to any story. He manages the Auto Mall on the west end of Bemidji.

“Yes, the economy is down.” And “Yes, folks are buying more used cars.” And “Yes, things slow up when gas prices are up.”

Jackson reports that customers are purchasing not only the 30 miles/per/gallon smaller cars, they are also still looking for those four-wheel drive pickups.

“Spring continues to be a good time for us,” he reports. People are buying vehicles as graduation gifts and in preparation for summer travel and work.

In fact, the Auto Mall has seen a slight increase in sales already this spring.

Jackson’s analysis of this? “It’s the sunshine. When the sun is out, people start smiling. And when they are smiling, they buy cars.”

Well, so much for efficient and shiny green bug story.

Hopefully, for the sake of area car dealers, as balmy spring weather continues to beckon bugs back into our world, so too will it beckon patrons back to our local car dealers.

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READER RESPONSES:

"Good story, Kathleen. I don't accept the complaints about our local- or national- troubles are the fault of the media. Whether it's car sales, houses, or clothing. People know what's "in their wallet or purse." They know if their job is teetering. They know what a doctor's visit costs them. Whatever the chatterers say, they... Read More do what they gotta. When the truck breaks down, they will act. At four dollars a gallon - fewer trips, more carpooling. Think about hybrids - wish there was an all-electric to buy. Salesmen are always selling.

Whether you write first person or third? Who cares? Just tell the truth. Hard times continue." -Gordon Prickett

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"Your article shows the importance of getting a good cross section of a market before a trend can be established. Interesting article.

Hope we don't see any green bugs ever." - Jim Kasper

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"I am hoping that the car in my garage, now, is the last petroleum-fueled vehicle that I will own. I'm going to try to make it last by riding my bicycle, because I don't have faith that the automobile industry is going to change very quickly. This would be a good time for the federal government to tack a $2/gallon tax on gasoline. At least that would keep the money in the USA, encourage alternative forms of transportation, riding sharing, minimizing car trips, and shopping for fuel-efficient vehicles." - Harvey Tjader

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