PUBLIC PUTTING MONEY INTO SAVINGS, NOT CARS

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, January 26, 1992                   TAG: 9201280259
SECTION: ECONOMY                    PAGE: 17   EDITION: METRO 
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE:                                 LENGTH: Medium
PUBLIC PUTTING MONEY INTO SAVINGS, NOT CARS
A lack of money, not declining consumer confidence, has caused the slump in new-car sales, says Tom Webb, chief economist for the National Automobile Dealers Association. People are trying to rebuild their savings, he said.
Whatever the reason, auto registrations in the Roanoke Valley declined 16.6 percent to 6,148 last year. The state total was down 14.5 percent to 270,000 cars in 1991. Registrations, while not an absolute indicator of new car sales, generally are a good indicator of the industry.
Webb's association predicts an increase of 1 million new cars and light trucks in 1992, but the December issue of its monthly magazine said "upturn remains elusive."
Although the industry's figures are flat or down, William J. Pinkerton, new Chevrolet dealer in Salem, said many consumers do not realize that interest rates on auto loans have fallen from the mid-teens to as low as 8\ percent in the past year.
"Very low rates are out there," he said.
Prospective buyers are interested in the size of monthly payments, he said. The decline in sales brought rebates and lower prices. New-car prices are "very competitive," Pinkerton said.
The market is "really tough," he said, but his sales force had a better record for the first half of January than in the entire month of December. Used-car and pickup sales are very strong and new cars have picked up at his dealership, he said.
Pinkerton, who bought the formerly bankrupt Salem company in September, said, "I never thought I'd be selling this many cars in a down market." He said his sales are complicated by his location between two strong Chevrolet dealers - Berglund in Roanoke and Shelor in Christiansburg.
From his observations after 20 years in the auto business, he said, consumer confidence and car sales go hand in hand.
The national dealers' organization took a realistic look at its members' business in its forecast.
While car sales have languished, the auto parts aftermarket has taken off. The average age of a car today is more than 7 years, according to Nicholas Taubman, chairman of Advance Auto Parts. "There are so many cars out there," he added.
Advance Auto is expanding and other well-managed companies in the business are doing well, he said. At the same time, "a number did not do well."
The parts market is very competitive, but "the business is there," Taubman said.

by Archana Subramaniam by CNB