Jackson sees auto sales jump from idle to roar

Colorado Automobile Dealers Association Tim Jackson has a lot of good news.

His organization released a report recently that said 2011 registrations of new cars and light trucks in Colorado rose 15.5 percent since 2010.

The report also indicates that auto sales might be on the rise for while because registrations were up 20.8 percent in the final quarter of 2011 from the same period of 2010, and 24.9 percent higher in December 2011 from the same month of 2010.

What do the numbers mean?

Jackson didn’t mince words.

“The Colorado auto industry has come roaring back,” he said.

He was also quick to note that demand for new vehicles is a reflection of the improving health of the overall economy.

Jackson took some time this week to talk with the Business Journal about the auto industry and the Colorado Spring auto market.

How did you begin working in the auto industry, and what led you to the job you have now?

I grew up in and around the automotive industry in northwest Missouri and was operating an automotive center of my own for ten years beginning in the mid-seventies. Following that, in the mid-eighties, I got involved in association management and held five association CEO positions over the next twenty-five years.

When the long time president of Colorado Automobile Dealers Association decided to retire after 28 years in 2004, I was interviewed and hired for this roll. Additionally, my wife’s father was a new car dealer in Missouri and she grew up in and around the business and has served as a controller for new car dealerships for more than 30 years.

Colorado auto sales took a giant leap in December. What kind of statewide and national figures do you expect in the year ahead?

Currently the trend is toward increased sales across all brands and across many models and types of vehicles. Nationally, the auto industry hit an all-time high in sales in the year 2000, at a “Seasonally Adjusted Annual Rate of Sales (SAARS)” of just shy of 18 million new cars. That 18 million became the high water mark for new car sales in the United States spanning the time of over the past 100-year history of the industry.

In Colorado that year, we also hit the all time high for car sales at 208,000 units. Sales in the US and in Colorado generally declined between the years of 2001 to 2009, with especially big declines in both 2008 and 2009. At the same time the national number fell below ten million for the first time in modern times, in Colorado fell to 104,000, half that of the year 2000.

We are back at 130,000 plus units in 2011 and expect to increase that further in the coming year.

What inside perspective about the Colorado Springs auto-sales market can you offer? Any trends on the horizon? What works down here?

Overall, the trend in our industry is toward greater consolidation and thus fewer overall number of dealerships, yet with higher throughput at each store. We expect the number of dealerships in Colorado Springs to stay at or near its current level.

Consumers are very well served by the automotive industry as the quality, durability and longevity of the new car product has grown exponentially over the past 25 to 30 years. It was uncommon, even 20-years ago for someone to keep a car more than 100,000 miles the cars were viewed at that time as being worn out, now consumers can reasonably expect to keep the car they drive out of the new car showroom for as much as ten or twelve years and 200,000 to 300,000 miles. Quality has improved monumentally.

Warranties and other protections have grown in ways commensurate with the quality of the cars, reducing the expense consumers would otherwise have to pay to keep their cars maintained and on the road.

In fact the average age of the overall fleet of cars on US highways today has now surpassed 10.8 years and represents the oldest automotive fleet in history.

How much positive effect do high-publicity auto advertisements, like movie-star Super Bowl commercials, have on sales? How can dealers capitalize on that?

The Super Bowl commercials generally work to energize and excite the public about a certain car model or brand on the road.

While the positive impact of the commercial may not be felt for months or even years after it first airs, each of the Super Bowl commercials and other high profile advertising that is similar helps develop brand image for auto manufacturers and the new cars they build.

New car dealers will find a number of ways to capitalize on those commercials by working to localize the message gained from the widespread international exposure reached at the Super Bowl.