Gas prices starting to affect local dealerships

Rising gas prices and fears of a recession are beginning to impact local car sales, Kirkland dealerships say.

Rising gas prices and fears of a recession are beginning to impact local car sales, Kirkland dealerships say.

“Our numbers are down slightly, but we’re getting our share of the market,” said Brett Johnson, an owner of Lee Johnson Chevrolet-Mazda, one of 16 car dealerships located in Kirkland. He also said, however, sales have been slow at a time of year when car dealers expect to do increased business. Johnson said he has seen significant declines in purchases of SUVs as gas prices have risen to record levels in the Puget Sound, and customers are trading in their older and larger gas-guzzling vehicles for smaller cars such as the Mazda 3 compact model, his best seller.

In Kirkland, the cheapest gas in town last Wednesday was $3.59 was at the Rose Hill Arco on 85th Street. According to the GasBuddy Organization, a Web-based gas-price tracker, the average price of gas for the week of April 21 was $3.65 per gallon. A number of industry analysts expect that to rise to $4 per gallon by this summer, on average about a dollar more than last year.

Green Car Company sales manager Greg Rock, who sells biodiesel, electric and hybrid vehicles, sees $8 per gallon gas prices as a reality in the not-to-distant future. He called current prices “just the beginning.”

Cheap energy of the past has fueled the infrastructure of today, which is built around highways and vehicles that use gasoline, Rock said. Now that prices have risen nearly 300 percent over the past five years, he thinks the smart consumers will reinvest in their half of the equation by buying fuel-efficient or alternative energy vehicles.

“People need to cut their losses and make the switch,” said Rock, whose dealership stands to benefit from rising prices.

But the Green Car Company has also seen sales decline as fuel efficiency and environmental concerns seem to have taken a back seat to spending worries in the economic downturn, Rock said.

“We’re seeing a bit of a disconnect,” he said. “People are looking at their economic problems, but not looking at the underlying issues.”

Area motorists appear to have hunkered down instead of switching to one of Rock’s biodiesel fueled Volkswagen TDI cars, which get 42 miles a gallon, or paying $11,000 for a conversion to an electric plug-in system.

Partly to blame is falling consumer confidence, which is down to its lowest level in nearly three decades, according to a survey released last week by the University of Michigan.

Ford of Kirkland owner Jim Walen also reported flat sales for the spring. He said his best seller was the Ford Focus (average 34 mpg), while truck sales are down. He was confident, however, in the company’s effort to re-brand itself as customer focused, efficient and environmentally friendly. Ford plans to revamp 80 percent of its product line by putting more fuel-efficient engines in their cars and trucks, adding a hybrid passenger car to the mix and offering smaller car models in the SUV, compact and sub-compact categories, Walen said.

“There’s been a shift towards gas mileage,” he said, “We see that. The writing is on the wall … We’re positioned to deliver the products that people want and need.”

Back at the Lee Johnson’s Chevrolet-Mazda dealership, Johnson is hopeful that his family dealership — celebrating their 75th anniversary in May — will weather the downturn as his forebearers have done.

“We’ve had tough times before — the depression, the war, the ‘70s,” he said. “And we’re doing better than 2006 so far. We’ve been through this.”

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