Auto sales: the race is on.

• Author: Richardson, Jeffrey
• Position: Industry Overview

Competition among Anchorage dealerships is fierce.

You know a market is competitive when a crowd of well-established rival vendors report substantially different sales trends. Or when dealership managers level charges of impropriety in advertising against one another. Or when one Ford dealer sponsors a rodeo next door to the showroom of another. Competition, always vigorous in the Anchorage auto sales market, seems to have sharpened in the last couple years.

Recent patterns in local auto sales reflect many of the trends and problems confronting the auto industry everywhere. Nationally, auto prices for 1992 averaged $540 more per car than last year. While sales have improved overall, their pattern has been characterized as stop-and-start.

Anchorage auto dealers, as with home builders and other retailers, have had to find ways to coddle and convince cautious consumers who can't decide if the economy is coming or going. These dealers vary in their analysis of the current market and what has caused the competition to heat up recently.

Joe Leavitt, vice president of Anchorage Chrysler Dodge Center, says lagging sales at his agency can be traced both to the state's recent recession and

generally sharper buyers. "They want that good deal," he states. "Ten years ago, they didn't want the good deal; they saw a car they wanted, they bought it. The dealers aren't making the profit that they were 10 years ago."

Leavitt notes that manufacturers have been stressing customer service as margins shrink. Extensive staff training, mandated by automakers, is now standard procedure for most agencies. "All manufacturers, including the imports, are pushing for customer satisfaction. The training is designed to make the customer happy in a multitude of ways," he explains.

Leavitt says that nagging economic jitters in Anchorage are slowing his agency's sales. He explains that bad credit ratings stemming from home foreclosures and other troubles after the 1986 downturn have put a damper on the car purchase plans for many consumers who otherwise would have been trading in during the period since then.

"The traffic hasn't dwindled as much as the number of people with good credit has dwindled," Leavitt notes. "It's put added pressure on sales volumes. Prior to 1986, 90 percent (of potential customers) had good credit. Now, we're probably down 15 percent to 20 percent. We thought we would have recovered by now, but we haven't."

Leavitt reports that prior to 1986...