Ford dealers report sales, leasing decrease.

Ford dealers report sales, leasing decrease

Northern Ontario Ford dealers are reporting less than enthusiastic sales figures for the first half of 1990.

Comparing the first six months of this year with the same period during 1989, a dealer consensus indicates that results in both the new car sales and leasing divisions are marginally less.

All are attributing the slump in sales to high interest rates and confusion over the proposed Goods and Services Tax (GST) which is set to take effect on Jan. 1.

"The confusion concerning the impact (of the GST), whether positive or negative on the purchase price, has helped prompt customers to become much more conservative in their buying habits," explained Paul Wickett, part-owner of Intercity Ford in Thunder Bay.

Dan Courville, general sales manager for Cambrian Ford in Sudbury agrees.

"Couple high interest rates with the GST and you have a very pessimistic, negative view of purchasing high-ticket items. They (cars) are on the back burner until things get straightened out," claimed Courville.

Courville, whose dealership has only been recording a sales slowdown since May, said that, due to high sales figures achieved at Cambrian Ford over the past six years, the market has reached the "saturation point."

Courville explained that in 1982 the average age of a car on the road was eight years. The current average age has decreased to between four and five years.

"How many new cars can people buy?" he questioned.

Although admitting that the combination of high interest rates and the GST is "the greatest cause of damage as people tend to hold on to their money," David Worth, the principal dealer of Highland Ford in Sault Ste. Marie, said car sales in the Sault are suffering for a third reason.

Consumers in the Sault are waiting to see if the economy is stable before they consider the purchase of larger-ticket items, he said.

Even though he remains optimistic, Worth admitted that automobile sales in the Sault will hinge on what happens to the local economy during the remainder of this year.

"It is very difficult to see what's going to happen in the next six months," he said.

Courville explained that aggressive marketing by the manufacturer will help minimize any reduction in sales.

Courville said subsidized financing and the release of the 1991 models will improve sales.

Pinning their hopes on the '91 models to increase sales, Ford dealers in Northern Ontario are enthusiastic about three models in particular.

Wickett reported that the '91 Escort is already being well-received in Thunder Bay. He attributes the model's popularity to the complete redesign it has undergone.

"It has become a world-class auto," he said.

Other '91 models that Ford dealers expect will be big sellers, said Worth, are the Crown Victoria and the Explorer truck.

"People are very excited about these models. We've sold some already, but we only have a limited quantity."

Despite the slump in new car sales, several of the Ford dealers reported that their leasing divisions are holding their own.

Courville reported that the leasing business at his firm is anticipated to remain steady.

"There has been no change recorded to date. It's the same as it was in '89," he said.

Courville said that leasing accounts for approximately 20 per cent of the dealership's total revenue.

Rick Hanselman, sales manager for George Stockfish Ford Ltd. in North Bay, also said leasing levels were "on par with those of last year."