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Chrysler's sales, leasing figures match 1989's; dealers optimistic.

Dealers optimistic

Chrysler's sales, leasing figures match 1989's

Sales of Chrysler products in Northern Ontario during the first half of this year were similar to the sales totals during the same period in 1989, say area dealers.

"It's been a record year so far," said John C. Flannigan, sales manager for North Bay Chrysler Ltd. "Right now we're at 100 per cent of last year and we're expecting a 10-per-cent overall increase for the year."

Noting that some other area dealers are complaining about flat sales, Flannigan said his dealership undertook "an aggressive advertising campaign" to attract buyers,

Chrysler dealers from Thunder Bay to North Bay say they expect the remainder of the year and early next year to remain relatively good for sales.

"I'm optimistic about the coming months," said Mike Comuzzi, owner and manager of Comuzzi Jeep Eagle in Thunder Bay.

"We aren't fully sure what the effect of the GST will be, but with the incentives and rebates that are out there, it shouldn't have a large effect."

Like Comuzzi, George Swikehardt in Sudbury and Jim Williamson in Sault Ste. Marie say the GST will have little or no effect on new automobile prices because of the removal of the current federal sales tax.

"There is a misconception about the GST and the effects it's going to have," said Swikehardt, sales manager for Laurentian Chrysler. "It might add about $100 or $200 to the price of a car. It's not a major increase."

"The GST will play a very little part in the purchase of a vehicle," said Williamson.

While high interest rates have made consumers wary of purchasing some big-ticket items, the dealers say it has had little effect on the northern auto market.

The dealers say reduced financing rates available through credit corporations have countered the effects of high interest rates on sales.

According to Williamson, owner of Riverside Chrysler Plymouth, the rate offered by the Chrysler Credit Corporation was about two percentage points below the bank rate at the time of the interview.

While sales remain strong in several communities in the north, weakness in some local economies has dampened sales performance in specific areas.

Williamson said sales at the Sault Ste. Marie dealership have been affected by impending contract negotiations at Algoma Steel.

"The contract with the mill is up in August and people don't want to spend the money just yet," he said. "But, so far, anything we've heard has been good, so we're not worried."

The release of the 1991 models has given the dealers cause for optimism. Among the models which they are pinning their hopes on are a restyled Voyageur van and Dakota pick-up truck and the new Acclaim automobile.

One dealership where sales performance has run contrary to the trend exhibited by the Chrysler dealers contacted by Northern Ontario Business was Mazzuca Motors of Capreol.

Sales manager Ron Bertrand said sales for the first half of the year were down about 20 per cent from the previous year.

"It's different things," he said. "People are worried about interest rates and the economy is seen as being weak."


A number of dealers also report good results at their auto leasing divisions.

According to Flannigan, two main factors have helped improve the leasing business at the North Bay dealership in recent years.

"People are beginning to realize that leasing is not strictly for business," he said. "And the salesmen are becoming more familiar with leasing."

Flannigan said the leasing business has increased to about 15 per cent of the dealership's total revenue.

"Leasing was something that only companies did," said Comuzzi. "Now it's also for the average guy off the street."

In addition, the ability to write off expenses has encouraged people in such occupations as sales to lease cars rather than purchase them.

Several of the dealers say the rate at which new vehicles lose value, as well as high interest rates, are pushing people towards leasing rather than purchasing.

Williamson said leasing makes sense to many individuals because "nine times out of 10, a person never pays off the loan before getting another car."

He added that potential clients like the idea that payments are made based on 60 per cent of the value of the automobile and a buy-back option from the company.

"Leasing has become very strong and more prevalent at our dealership," Williamson noted.
COPYRIGHT 1990 Laurentian Business Publishing, Inc.
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Copyright 1990, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Auto Leasing Report; Chrysler Canada Ltd.
Publication:Northern Ontario Business
Date:Aug 1, 1990
Previous Article:GM sales a barometer of local economics.
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