News & Resources

California car dealers finally seeing signs of recovery

Feb 15, 2011 Brian Bradley

The auto industry was one of the hardest hit by the recession. Dealerships saw their sales numbers drop precipitously with the loss of disposable income and consumer willingness to repair rather than trade in. However, signs of a recovery are underway and dealers in California are finally beginning to see the tide turn their way after four years of slow sales. According to the California New Car Dealers Association, the volume of vehicles sold in 2010 climbed by approximately 1.2 million - a 13.1 percent increase year over year. That marks the first time since 2005 that the state has seen vehicle sales increase over a 12-month period. The increase is being accepted as a very positive sign given the investment required to purchase a new car. "A car is kind of a frill," Robert Eyler, chairman of Sonoma State University's economics department, told the Santa Rosa Press-Democrat. "People generally don't tie themselves to a new vehicle unless they have the ability to pay for it." There is good news on the horizon as well. The CNCDA forecasts 13.3 percent growth in auto sales for 2011. That would come two years after the new car market bottomed out in 2009. However, the 2011 forecasts of roughly 1.3 million vehicles sold would not approach the 2005 total of approximately 2.1 million vehicles purchased.