BANDON, Ore. — Dealers haven’t witnessed a Memorial Day weekend like this past week since 2006, CNW’s Art Spinella said yesterday. He reported that closing ratios reached the 38 percent mark nationally, putting the industry on a 1.37 to 1.41 million-unit sales pace for May.
In some states, closing ratios reached as high as 45 percent. Spinella attributed the increase in closing ratios to a 9 percent increase in loan approvals, as well as a 15 percent jump in subprime loan approvals.
Sales were also helped out by a 31 percent surge in incentive spending during the second half of May. The average sticker prices of vehicles sold, according to CNW, was just north of $36,000, up from $34,200 in 2011.
May’s second-half pickup did cause pent-up demand to fall, however. “Those who put off a purchase have spent the past 15 days sifting through their model options,” Spinella tweeted over the weekend.
Ricky Woods, general manager of Faulkner BMW in Lancaster, Pa., said his dealership experienced a 300 percent increase in sales from last year. He attributed the pickup to the dealership’s TV and Internet ads.
Woods said the store’s sales team sold 20 cars – three new, 17 pre-owned – over the holiday weekend vs. five a year ago. The dealership was already realizing monthly sales increases leading up to the holiday weekend, with the store’s per-month sales average jumping from 70 vehicle sold last year to 100 this year. Woods said he expects the dealership to close May with 110 vehicles sold (65 used, 45 new).
Woods also explained that this is the first Memorial Day weekend at Faulkner BMW’s new location. He added that sales were helped out by the fact that many of the dealership’s competitors were closed over the holiday weekend.
“We’re pretty lucky,” Woods said. “Our sales level stayed relatively consistent in the downturn. But people who needed cars in ’07, ’08,’09 and decided to hold off are now not holding off any longer.”
The weekend also was profitable for Faulkner’s F&I department, which averaged two products per deal over the weekend, up from 1.2 products last year. “Our product penetration was up substantially, and profitability was up,” Woods said.
Chad Jennings, finance director at Tulsa, Okla.-based Jim Marina Honda, relied on Honda Financial Service’s 0.9 percent financing offer to draw in customers. He said the promotion helped the store roll 43 vehicles this past weekend, up from 25 delivered last Memorial Day weekend. Leading the way, Jennings said, were the Honda Accord and Civic.
“Last year, we were definitely on a limited inventory,” Jennings said, referring to the supply shortages caused by last March’s earthquake disaster in Japan. “We weren’t as bad as we got later [that summer]. We definitely were starting to feel it this time last year, but through the summer it was more pronounced.”
So far this year, Jim Marina Honda has averaged about 220 units sold per month, a 20 percent increase from 2011. Additionally, the store’s F&I department is 22 percent ahead of last year in terms of profit per vehicle retailed. “We maintained that this weekend,” Jennings said. “I thought this weekend was a good indication of the year. Customers are returning and I think the end of the year is going to continue to be strong.”