Car dealership sales ailing

GLENDALE — Economic factors have created a deep funk in sales along Glendale’s Brand Boulevard of Cars, mirroring a national downturn in automobile purchases as customers continue to feel the pinch of an enduring housing slump, a pervasive credit crunch and soaring gasoline prices, officials said Thursday.

Two government reports released this week exemplify the troubles facing the auto industry.

On Wednesday, the Commerce Department said U.S. retail sales declined 0.1% in July — a 16-year low of 12.55 million units sold last month — and the Department of Transportation said that since November, Americans have driven 53.2 billion miles less than the same point last year.

July’s downturn marked the ninth straight month of declining sales in the U.S. auto market, making it the longest such slump since the 2001 recession, officials said.

As Americans drive fewer miles and buy fewer cars, less revenue is generated for federal taxes culled from gasoline and diesel sales, officials said. Shadowing the slump in federal sales has been a decrease in city sales tax revenue from sagging car purchases, Assistant Finance Director Ron Ahlers said.

“Car sales are down, but leases are holding their own,” he said. “But, yeah, overall they’re down. This is a period of general economic decline, part of the usual business cycle.”

Last financial quarter, sales of new cars in Glendale dropped 16%, a $250,000 loss in city sales tax revenue, he said.

“But other things are up, like auto leases,” Ahlers said. “People are switching between buying and leasing and buying other [types of cars].”

Leases from January to March were up about $50,000, and the city reported a modest improvement in the overall sales tax revenue of 0.5%, he said.

Sales of new cars in Los Angeles County plunged more than 18.6% from January to March as dealerships along Brand Boulevard have been feeling the pinch of sparse customers and decreased revenue.

New car sales at Star Ford are down 20% from last year, said Alex Tamez, director of operations.

“Overall, we’re about the same in terms of sales as last year, but revenues have dropped,” he said.

“It hasn’t been great. Foreclosures have affected us. The banks that had financed homes finance cars. Now, [banks] are looking deeper. It’s harder to get people approved.”