New Car Sales in California Drop 2% : Economy: But major dealers see revenues jump 6.3%, magazine’s annual ranking shows. O.C. dealerships decline.

California auto dealers were battered by the state’s weak economy in 1992 as new car sales in the state fell 2% to 1.4 million units.

But the state’s largest and best capitalized dealerships often were able to maintain or even increase their share of consumers’ car dollars, according to a ranking of dealers’ gross 1992 revenue in the current issue of Auto Age Dealer Business magazine.

By cutting new car prices, hiking used car sales and increasing the sale of parts and services to recession-strapped consumers trying to keep their older cars on the road for another year, California’s major auto dealers saw their gross revenue jump a healthy 6.3% last year to $4.5 billion, according to the trade magazine.

The economy took its toll, however, as fewer of the state’s auto retailers made the magazine’s annual list of the nation’s 500 largest new car dealers based on 1992 sales of new and used cars, parts, service, financing and body repairs.

And the higher sales of those that did came at the expense of the hundreds of smaller, less financially stable dealerships, industry sources said.

At the end of 1992, California had about 1,750 new car dealers, down 5% from 1,845 a year earlier, according to the state Department of Motor Vehicles, which licenses dealers.

Casualties have been greatest in Southern California, where a three-year recession has cut deeply into consumers’ disposable income. The Auto Age listing, compiled from data supplied by the dealers, graphically details the hit California’s auto retailing industry took last year.

There are 10 fewer California dealers on the list--86 versus 96 in 1991--and the rankings of about half of those that remain plummeted dramatically as dealers from states with healthier economies forged ahead.

“The rest of the country has started coming out of the recession, and that’s what let them show sales increases,” said Jay Gorman, executive vice president of the California Motor Car Dealers Assn. in Playa del Rey.

“California still is in a deep recession, and I have not seen any indication that it will be any better this year. In all likelihood, it will be worse, with all the layoffs being announced in aerospace, defense and now the military (base closures). That’s a lot of people who won’t be buying new cars in California this year.”

In Orange County alone there are 27 fewer new car dealerships today than there were in 1991. That’s a decline of 9% a year--nearly twice the statewide average--as the county’s dealership count dropped to 122 from 149 despite the addition of four new Saturn franchises and a Chevrolet dealership in the same period.

“From what the dealers are telling me, 1992 was a worse year than 1991, no matter what the Auto Age list says,” said Kevin Allen, executive director of the Orange County Automobile Dealers Assn.

“The dealers who show up in the Auto Age 500 are the big ones. They are well-capitalized and in much better shape to survive this recession than the smaller dealers, and there are a lot of small dealers. The reason most of those dealerships are gone isn’t because business was too good,” Allen said.

In California, 25 of the 86 dealers on the list sold fewer new cars in 1992; 14 of them said their total gross incomes had slipped below the year-ago level.

One of those was Longo Toyota in El Monte, perennially the nation’s largest dealership.

Longo retained its first-place ranking again in 1992 but said it sold 1,241 fewer new cars than in the year before and reported a 2.2% drop in gross revenue to $255.6 million. Longo’s 13,432 new car sales last year grossed $199.8 million, down from $208.8 million for 14,673 new cars sold in 1991.

Greg Penske, Longo’s general manager, said that while overall sales were lower, the dealership’s used car sales, net profit and market share all increased.

“Our market share among the 74 Toyota dealers from L.A. to San Diego went up. And our used vehicle sales went up 61 units, which helped our profits,” Penske said. “In a tougher market, we did better, with 11.9% of Toyota’s sales in the region,” up from 11.8% in 1991.

Helping Longo stay on top were higher-priced used cars. The dealership moved 2,743 of them for a gross of $26.4 million at an average price of $9,600 last year. That is about $1,100 per car higher than in 1991, when Longo grossed $22.7 million on the sale of 2,682 used cars.

The dealership also boosted parts and service income by $1.1 million, or 6.3%, to $20.1 million.

But the drop in new car sales had a double inpact, slashing Longo’s income from financing and insurance by 28% to $6.6 million from $9.2 million in 1991.

In addition to tracing the fortunes of California’s new car sales, the Auto Age report underscored the state’s continuing love affair with foreign automobiles. Forty-eight of the California dealers on the magazine’s list were European and Japanese--56% of the total. Nationally, foreign brands accounted for just a quarter of the 500 biggest dealerships.

The most common franchise on the list was Ford, with 155 dealers (28 in California), followed by Chevrolet with 125 (five in California). All Japanese brands combined accounted for 123 dealerships. Of the two European auto makers, Mercedes-Benz had 14 dealers on the list and BMW had two.

Both of the BMW dealers are in California--one is in Orange County--as were eight of the Mercedes dealerships, including three in Los Angeles County and two in Orange County. Japanese auto makers had 37 California dealerships in the top 500, and Toyota had 21. Ford topped the California list with 28 dealers.

Top O.C. Dealers

Despite a sagging economy, 14 Orange County car dealerships made Auto Age Dealer Business magazine’s list of the nation’s 500 largest car dealerships for 1992. The list, based on retail sales of new and used cars, parts and service, also revealed that Orange County had six of the state’s 25 largest dealers. How Orange County’s top dealers ranked:

1991

New New-car cars sales Dealership, City sold (in millions) House of Imports Mercedes, Buena Park 1,432 $120.1 Fletcher Jones Mercedes, Newport Beach n/a n/a Toyota of Orange, Orange 3,704 79.6 Toyota Garden Grove, Garden Grove 3,252 67.5 Tustin Lexus, Tustin 1,104 51.4 Tuttle-Click Ford, Irvine 2,182 59.1 Villa Ford, Orange 2,948 62.2 Elmore Toyota, Westminster 3,170 66.4 Lew Webb’s Irvine Toyota, Irvine 1,780 46.0 Ted Jones Ford, Buena Park 2,189 45.3 Penske Honda, Westminster 2,506 47.2 Crevier BMW, Santa Ana 754 38.9 Campbell Ford, Garden Grove 1,661 41.1 Allen Cadillac-GMC, Laguna Niguel n/a n/a

1992

New New-car cars sales Dealership, City sold (in millions) House of Imports Mercedes, Buena Park 1,455 126.8 Fletcher Jones Mercedes, Newport Beach 1,181 90.3 Toyota of Orange, Orange 3,872 84.9 Toyota Garden Grove, Garden Grove 2,667 64.1 Tustin Lexus, Tustin 1,291 62.9 Tuttle-Click Ford, Irvine 2,308 62.0 Villa Ford, Orange 2,747 59.0 Elmore Toyota, Westminster 2,416 56.9 Lew Webb’s Irvine Toyota, Irvine 2,231 53.3 Ted Jones Ford, Buena Park 2,314 50.6 Penske Honda, Westminster 2,004 43.2 Crevier BMW, Santa Ana 822 42.8 Campbell Ford, Garden Grove 1,534 39.3 Allen Cadillac-GMC, Laguna Niguel 857 37.5

Source: Auto Age Dealer Business; Researched by JOHN O’DELL / Los Angeles Times

The Top 10

Ten of the 86 top automobile dealerships in the state are in Los Angeles and Orange counties, according to a 1992 list compiled by Auto Age Dealer Business magazine. The dealerships were ranked by total revenues from the retail sales of new and used cars, and parts and service.

1991

New New-car cars sales Dealership, City sold (in millions) Longo Toyota, El Monte 14,673 $261.3 Galpin Ford, Sepulveda 5,970 145.0 House of Imports Mercedes, Buena Park 1,432 120.1 Don Kott Ford, Carson 4,140 109.9 Norm Reeves Honda, Cerritos 7,003 128.5 Toyota of Cerritos, Cerritos 3,426 69.7 Downtown L.A. Motors Mercedes, L.A. 1,302 82.1 Fletcher Jones Mercedes, Newport Beach n/a n/a Toyota of Orange, Orange 3,704 79.6 Longo Lexus, Cerritos 1,433 57.3

1992

New New-car cars sales Dealership, City sold (in millions) Longo Toyota, El Monte 13,432 $255.6 Galpin Ford, Sepulveda 7,289 187.8 House of Imports Mercedes, Buena Park 1,455 126.8 Don Kott Ford, Carson 4,065 124.6 Norm Reeves Honda, Cerritos 5,909 120.7 Toyota of Cerritos, Cerritos 4,600 105.1 Downtown L.A. Motors Mercedes, L.A. 1,360 92.3 Fletcher Jones Mercedes, Newport Beach 1,181 90.3 Toyota of Orange, Orange 3,872 84.9 Longo Lexus, Cerritos 2,035 83.9

Source: Auto Age Dealer Business; Researched by JOHN O’DELL / Los Angeles Times