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Luxury cars see drop in sales

Local dealers taking strategic countermeasures

Posted: October 17, 2008 8:17 p.m.
Updated: December 19, 2008 5:00 a.m.

Following a national trend, local car dealerships have seen a drop in luxury car sales.

 
When market-analysis firm J.D. Power and Associates released a report on automobile sales Oct. 9, it gave a bleak outlook for the rest of this year and 2009.

Auto sales for this year are down 16 percent and will continue to drop, the forecast says.

With economic times getting tougher, a subclass of automobile — the luxury car — is also seeing sales drops.    For example, Mercedes-Benz sales, compared to September 2007, are also down 16 percent.
It’s a drop that’s also being felt here in the Santa Clarita Valley.

Kevin Malone, co-owner of Mercedes-Benz of Valencia, said sales at his dealership are down about 20 percent compared to last year.

Due to the dip, Malone said his dealership has had to make more strategic moves.

One move recently made was the hire of a local to lead the sales team.

The company hired Dennis Murray, a longtime resident of Santa Clarita and a former football player at College of the Canyons, in late August as its general sales manager.

The 18-year auto sales veteran said his familiarity with the local area is an advantage for him.

“I do know a lot of people in the community,” Murray said. “I go to church in the community. My son plays football for the Warriors. It makes it a lot easier when people come up to me.”

But more importantly, Murray said there are certain methods Mercedes-Benz of Valencia is using to help slow the decrease in sales.

It’s a more back-to-basics approach. The first Mercedes-Benz dealership in Santa Clarita, opened just three years ago this December, saw steady growth for the first couple of years.

Due to the changing economic climate, sales dropped.The new approach for the business is to handle its customers on a more case-by-case basis.That means, customers will be asked better qualifying questions.

Murray said when times were booming, banks would approve loans more easily, and, in turn, it put people in cars that they were probably not suited for.

Customers are realizing that and are coming to the dealership to buy cars that are better equipped for their situation. Murray said he’s relying on his sales staff to be more thorough so as to better serve clients’ needs.

Whereas, the new business was concentrating on building its customer base in the recent past, it’s now relying heavier on maintaining existing business.

Murray, who has spent a majority of his career working at various Santa Clarita Valley dealerships, said he has not seen a decline in car sales like this since the mid-1990s, when the valley’s top auto baron, the creative Norm Gray of Magic Ford, left.

Murray said people are now shopping for cars with a higher urgency to get the absolute best price. He said his last dealership lost a customer over cents a month.

Murray said Mercedes-Benz will now be more aggressive with its marketing on one side and will try and connect better with customers through honesty and case-by-case incentives. It also will drive a “Shop Local” approach to potential customers to keep tax dollars in the area.

Speaking of shopping local, Malone said Murray’s local ties were a determining factor in his hire.
“There’s no question he’s a professional. He knows the business and understands our clients,” Malone said. “I think being in this community, he’s one of us. … I think when you go through tough economic woes, a lot of business comes down to relationships.”

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