Vehicle sales in Md. climb 29.7%

June 17, 1994|By Ted Shelsby | Ted Shelsby,Sun Staff Writer

Pent-up demand and renewed consumer confidence sent buyers swarming into new-car showrooms across the state last month, resulting in a 29.7 percent jump in vehicle sales.

According to title registration figures released by the Maryland Motor Vehicle Administration, the big jump in sales last month followed a 34 percent increase during April. For the first five months of 1994, Maryland dealers have sold 129,435 new cars and light trucks, more than 18 percent ahead of last year.

All regions of the state seem to be sharing in the good times.

"Business is just great," said Lester Stanford, sales manager at Fitzgerald Auto Mall in Frederick, which sells Chevrolet, Geo, Cadillac, Dodge Mazda, Volkswagen and Saab.

At Sherwood on the Shore, a Ford and Lincoln-Mercury outlet in Berlin, James Blecki reports that "sales are up across the board" and Donald Stagg, general manager at Fox Automotive Inc., which has eight outlets in the Baltimore area and in Laurel, says "business is booming."

There are a number of reasons for the robust sales activity. Dealers say that consumers seem to have a lot more confidence in the economy now than a year ago, and they are eager to replace high-mileage vehicles.

"People feel that their jobs are more secure," Mr. Stagg said. "The big companies in the Baltimore area are not laying as many people off now as they were in the past. It seems like things are beginning to settle down."

For Cheryl Rogers, a 22-year-old advertising salesperson with Network Communications Inc., her 7-year-old, 97,000-mile car had become a liability.

"I got tired of dumping money into my old Nissan Sentra for repairs," she said. She treated herself to her first new car -- a gold Saturn with air conditioning and cassette stereo.

Paul Anecharico, sales manager at Bill Kidd's Toyota and Volvo in Timonium, says a sharp increase in leasing, which can lower the monthly payment of driving a new car, is another factor. He says leasing now accounts for about 40 percent of the dealership's total sales.

(In a leasing arrangement, the manufacturer buys the car back from the dealer and leases it to the customer, so the transaction is recorded as a sale by the MVA.)

One of Mr. Anecharico's customers, Andrew Braun of Owings Mills, went the leasing route last month when he decided it was time to replace his 1988 Camry, which had more than 100,000 miles on the odometer. In addition to the favorable monthly payments, he says, Toyota offered a $500 rebate on the lease of a new car.

"Leasing is making cars very, very affordable," said Mr. Anecharico. "People might not think a $30,000 car fits in their budget, but with a lease it can. The monthly payments on a two-year lease are significantly lower than for five-year financing."

Mr. Blecki, the Eastern Shore salesman, said a change in Maryland law -- and the early arrival of summer-like conditions -- also have sent buyers into showrooms.

Under the new law, he said, it is illegal to refill the Freon in a car's air conditioning unit without repairing all leaks, a repair that can cost from $200 to $800. "We've had people trade in their cars rather than have the air conditioner fixed," Mr. Blecki said.

Rebounding auto sales is seen as more evidence that Maryland's economy, which has lagged the nation's, is out of the doldrums.

In fact, at least in this sector, the state seems to be leaping ahead of the nation. In the United States as a whole, new-car and light truck sales rose just 3 percent last month.

Auto sales accounts for about one of every six dollars of Maryland's total retail trade, according to a recent study from Walpert, Smullian & Blumenthal, a Towson-based accounting company.

Michael Conte, a University of Baltimore economist, was particularly heartened by the strong showing of car sales last month, when interest rates were on the rise.

"It shows that people have a lot more confidence in the economy and they are still buying big ticket items on credit," he said.

The Motor Vehicle Administration figures show that 32,088 new vehicles were bought last month, compared to 24,747 in May of 1993. The average price was $17,432. This was slightly more than $1,000 above the average new vehicle price last year.

Used-car sales were up 3.6 percent last month, compared with the same period last year. Dealers sold 48,123 used vehicles, at an average price of $4,879. This compares with total sales of 42,490 in May of 1993, when the average price was $4,264.

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