CITY AUTO DEALERS SEE SALES REVVING UP IN '96.

Byline: R.A. Hutchinson and Patricia Farrell Aidem Daily News Staff Writers

While the rest of the nation's auto dealers are anxious about 1996, the Santa Clarita Valley sales force predicts higher sales as the Southern California economy continues to climb out of the doldrums.

Analysts and dealers say positive forecasts from economists at UCLA and UC Santa Barbara and an improving housing market are early indicators of consumer optimism.

"We think sales will pick up in 1996 over 1995," said Scott Young, owner of Valencia Mazda Pontiac Buick on the Valencia Auto Row.

"I'm not saying that from an industry point of view, but from an economics standpoint," Young said. "Locally, things seem to be improving, certainly in new home construction, commercial construction. With the growing Santa Clarita economy, we'll have an opportunity to sell."

Young's optimism, and that of other owners along the 25-dealership Auto Row is contrary to a national survey produced by Agoura Hills-based J.D. Power and Associates, an international marketing information firm specializing in consumer opinion research, consulting and economic forecasting.

According to Power's 1995 Dealer Attitude Survey, pessimism emerged as an overriding theme.

"That's what made it news. Auto dealers normally are very optimistic . . . but not always practical," said Don Keithley, a partner in J.D. Power. "But there are regional markets in the United States that are doing quite well."

Keithley said Southern California is one of those markets because many of the factors that are worrying dealers in the Eastern United States have yet to reach the West Coast. For example, Keithley said many dealers view national used car operations, such as CarMax, as a threat to the franchised dealer.

"Most of that hasn't reached California yet," he said.

In addition, Keithley said, economic forecasts released by the University of California in Los Angeles and Santa Barbara painted a positive picture for 1996 in Los Angeles and Ventura Counties.

Santa Clarita, in particular, is growing with an influx of retail outlets and a boom in new housing.

"The general economic climate is showing positive signs," he said.

Joe Caso, owner of Valencia's Frontier Toyota, said new lease programs as well as new lines of sport utility vehicles are drawing in the buyers - a quarter of whom come from outside the Santa Clarita Valley.

But the real increase in sales, Caso said, will come with local growth and improvements in California's economy.

"I think there's a lot of optimism in Southern California, especially with the way the state has rebounded," Caso said. "The growth in Santa Clarita will help a lot. It's exploding out here with new business. There's more homes going up, more people."

1995 was somewhat disappointing for the industry nationwide because sales did not meet high expectations from manufacturers as well as from Wall Street, Young said.

But low interest rates and continued economic growth should translate to "another better-than-average year," Young said.

Local dealers also say that Auto Row itself is a draw because it gives buyers, including those from outside the Santa Clarita Valley, a chance to look at more than two dozen kinds of cars in a concentrated location.

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Photo (color) Scott Young, owner of Valencia Mazda Pontiac Buick, sees new construction as a sign of economic health. Dusty Locke/Special to the Daily News