Auto Dealers Cautiously Optimistic

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Car sales in British Columbia are down 20 per cent this year compared to 2008, but the new president of the New Car Dealers Association of B.C. thinks the worst is probably behind the industry.

That figure compares year-to-date sales, but according to Statistics Canada, June’s new car sales province-wide were only 13 per cent below the same month last year. And July this year compared to June saw a 1.5 per cent increase, so the situation is improving, says Blair Qualey.

Compared to Ontario and Quebec, where the well-advertised problems of General Motors and Chrysler decimated the dealer network, BC has seen a relatively small drop in the number of new car dealerships. The province has lost half a dozen GM dealers so far. The association totals 374 member dealers of all types.

Compared to Central Canada, “we dodged a big bullet.” Another difference between BC and the east was that the west coast was not so “over-dealered” in the first place, Qualey says.

Not to underestimate the troubles of the last 12 months. “It’s been a very tough year. These guys are hanging on by a thread,” he says.

There have been big changes in the way the new car sales business works, he adds, including the continuing trend to ever-larger dealerships, some with multiple brands. And it’s still a challenging business to make a buck.

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One dealer told Qualey recently, “I make less from selling you a car than the guy who made your suit.” He was referring to the profit margin percentage.

But he adds “I think we’re starting to be cautiously optimistic … we’re making progress in inches. People are starting to feel a bit better about where things are going now.”

Qualey is not a “car guy,” having spent the previous seven years with the Vancouver Board of Trade before he took over the auto dealers’ group in October, 2008, a period when the board’s membership increased to 6,000 from 3,500.

“I don’t think they wanted anyone from the industry who came with baggage,” says Qualey, who was in Victoria as part of a six-week tour of the province.

For the record, he drives a Toyota Camry hybrid. “It comes with the job,” he says. The interview took place at Pacific Mazda, a busy import dealer, but there’s no significance other than Pacific Mazda partner Mike Stevulak is on the association board, and directors get to host the president when he’s in town.