Auto dealers in the region are suffering steep drops in sales as recession-stricken consumers increasingly forgo big-ticket purchases — a downturn that has started to reverberate in Washington-area communities.
While a few dozen dealers in Maryland and Virginia have closed in the last 12 months, industry representatives look with greater anxiety at the coming year as consumer confidence continues to spiral down and skeptical lawmakers on Capitol Hill consider a $34 billion rescue package for the Detroit auto manufacturers.
In Virginia, dealerships sold 10,000 fewer vehicles than they did a year earlier, according to figures released Friday by the Virginia Automobile Dealers Association. And this year the commonwealth lost 20 dealerships, mostly small ones, said association spokesman Michael Allen.
“We do have some concerns that we may lose some more before year end,” Allen said. “And if things don’t turn around quickly in 2009, we may lose even more.”
The slump is rippling far beyond the industry itself. Some nonprofits, for whom auto dealerships historically have made up a generous donor base, fear those funds won’t be there for long. Others are already seeing the money disappear.
Brian MacNair, chief development officer of D.C. Central Kitchen, a nonprofit that distributes food to the needy, said a dealership pulled out of a $10,000 Thanksgiving “virtual turkey” sponsorship this year. He declined to name the dealership, which had sponsored the event for the past three years.
Tammy Darvish, vice president of Darcars Automotive and a prolific fundraiser for philanthropies, said she was refocusing her philanthropic efforts to accommodate the fiscal crunch.
She said she was contacted by a friend a few weeks ago about building a new football stadium at her son’s high school.
“All I could think of was, for me right now it’s basic necessities of life — food, shelter, clothing and life-threatening diseases — where my personal philanthropy focus will stay,” Darvish said. “The football stadiums, sending the pompom girls to Disney World for a competition, all of that I think is great and it’s important — but now it’s a much more difficult sell.”
Dealers also are containing costs through cuts to benefits and hours, and in some cases, layoffs, and making due with existing inventory, industry officials said.
“Since October, everybody has been dramatically impacted,” said Peter Kitzmiller, president of the Maryland Automobile Dealers Association. “It doesn’t make any difference if you are a Honda dealer or a Chevrolet dealer. Sales are as bad as they’ve been in about 25, 30 years for everybody.”
Kitzmiller said the state has lost about a dozen dealerships in the past year and opened only one. He expected a 13 percent sales drop for Maryland dealers in 2008.
The nation’s three largest auto manufacturers are asking Congress to pass $34 billion in bridge loans to keep the industry afloat. Local dealers are hoping the package will restore consumer confidence.
“I think it will trickle down to everybody,” said Don Burdette of Burdette Brothers Pontiac. “I think it’s very important to the American economy. Everybody in this country either knows somebody or is related to somebody in the car business by some fashion.”
