Auto sales drive Ohio economy

The 2016 Dayton Auto Show at the Dayton Convention Center includes cars from Alpha-Romeo to Volkswagen and has filled the hall. TY GREENLEES / STAFF

Combined ShapeCaption
The 2016 Dayton Auto Show at the Dayton Convention Center includes cars from Alpha-Romeo to Volkswagen and has filled the hall. TY GREENLEES / STAFF

U.S. auto sales increased again in 2016, but local dealers and manufacturers predict sales will flatten out this year.

Last year marked the seventh consecutive year of growth for the U.S. auto industry, with new-vehicle sales reaching more than 17.55 million — just surpassing 2015’s already record-breaking numbers of 17.5 million, according to Autodata Corp. The auto industry continues to play an integral role in Ohio’s economy, accounting for more than $31 billion in sales and nearly 18 percent of total retail sales statewide, according to the Dayton Area Automobile Dealers Association.

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“The auto industry continues to be an essential part of the economy, and 2016 was certainly no exception,” said Ami DeAngelo, Dayton Auto Show director of events.

But national sales have leveled out at the start of the year. January is typically the worst month of the year for auto sales, and that rang true last month. The seasonally adjusted annual rate dropped to 17.61 million in January, down from 18.43 million in December, according to Autodata Corp.

Dan Nagel, the general manager of White-Allen Honda on 630 N. Main St. in Dayton, said his dealership expects sales to remain high throughout the year as Honda releases new vehicle models. The dealership increased sales by more than 19 percent last month compared to the same time in 2016, and Nagel said they were on track to make good numbers in February. He attributes more sales this month partly to the unseasonably warm weather.

Nagel said more customers locally are interested in leasing vehicles than ever before, and they are also increasingly trading in their cars for small SUVS and other larger vehicles.

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Local manufacturers impacted 

As more consumers look at larger vehicles, the trend is leading to manufacturers producing more vehicles like the Toyota RAV4, Ford Equinox or Hyundai Santa Fe, Lawrence said.

That push is impacting automakers, and multiple businesses in the area also benefit from record auto sales. The auto manufacturing industry still employs thousands of workers across the state. Though GM used to employ workers at its former assembly plant in Moraine, the company still contributes to the local economy. General Motors saw a net revenue of more than $166 billion in 2016, an increase of 9.2 percent compared to 2015.

GM also has a 60 percent stake in DMAX in Moraine, which is the maker of the Duramax diesel engine, and employs hundreds in the area.

Honda has about 13,000 employees in Ohio, including an engine plant in Anna. Approximately 2,000 workers commute from the region to work at Honda’s facilities.

E-commerce influencing car buying 

More websites like autotrader.com and cars.com are luring customers in, giving them the ability to browse without going to a car lot. Online marketing is now increasingly the most important part of a dealer’s sales activities, and approximately two-thirds of franchised dealers believe consumers would like to complete the entire buying process online, according to a 2016 report from DealerSocket.

Nagel said Honda did a survey that showed 85 percent of its customers will visit a website before purchasing any vehicle.

“They already know what they want when they come in,” he said.

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Customers are only visiting about 1 to 4 car dealerships on average, compared to years ago when people would visit 6 to 8 dealers before purchasing a vehicle, according to Jay Lawrence of Jeff Wyler, which has locations in Springfield, Cincinnati, Milford and Batavia, among others.

People are doing on their car searches online without ever stepping foot in a dealership. When people do come in, they’re ready to buy.

Combined ShapeCaption
Last year marked the seventh consecutive year of growth for the U.S. auto industry, with new vehicle sales reaching more than 17.55 million - just surpassing 2015’s already record-breaking numbers of 17.5 million. Airport Toyota’s sales and leasing associate Arvin Ridley warmed up a RAV 4 for a customer last year. TY GREENLEES / STAFF

Last year marked the seventh consecutive year of growth for the U.S. auto industry, with new vehicle sales reaching more than 17.55 million - just surpassing 2015’s already record-breaking numbers of 17.5 million. Airport Toyota’s sales and leasing associate Arvin Ridley warmed up a RAV 4 for a customer last year. TY GREENLEES / STAFF

Combined ShapeCaption
Last year marked the seventh consecutive year of growth for the U.S. auto industry, with new vehicle sales reaching more than 17.55 million - just surpassing 2015’s already record-breaking numbers of 17.5 million. Airport Toyota’s sales and leasing associate Arvin Ridley warmed up a RAV 4 for a customer last year. TY GREENLEES / STAFF

“They’re there to buy,” Lawrence said. “We don’t get the foot traffic we used to.”

Car shoppers start their online research five to seven months before submitting an online inquiry, according to the report.

“I think it’s a very competitive marketplace,” he said. “I don’t look for very much growth at all. We’re at record numbers now. It’ll be a pretty flat year for growth.”

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