In a positive piece of economic news for the Austin area, new vehicle sales in Central Texas continued their upward trend in the first half of 2013, a reflection of growing consumer confidence, dealers and analysts said.
For the first six months of the year, sales in Central Texas are up more than 14 percent over the same period in 2012, with 58,161 new vehicles sold, according to Freeman Auto Report, a Dallas-based company that tracks new vehicle registrations. The report tracked sales in Travis, Williamson, Hays, Bastrop, Burnet, Blanco and Caldwell counties.
Area dealers have seen year-over-year sales increases each month of 2013; sales were up 62 percent in January, 10.8 percent in February, 3.3 percent in March, 13 percent in April, 6.4 percent in May and 4.3 percent in June. Austin-area dealers sold 9,920 new vehicles in June, a 4.3 percent increase over the 9,510 they sold in the same month last year, according to Freeman Auto Report.
Car sales are an indicator of economic health, economists say, because people tend to purchase new vehicles when they’re more comfortable about their own financial situation.
Other local indicators such as city sales tax revenues and job growth have been positive as well, said economist Jon Hockenyos, president of Austin economic consulting firm TXP.
“I think it’s a pretty clear sign that what we all feel and know is true – that the Austin economy’s doing pretty well,” he said.
Michael Marks, executive director of the Austin Automobile Dealers Association, said one local dealer is projecting a 40 percent sales increase this year compared to 2012.
“There’s a lot of new products out there and that’s helping the market a lot,” he said.
The upward trend in the Austin area is being seen throughout Texas, said Bill Wolters, president of the Texas Automobile Dealers Association, the state trade association for franchised new car and truck dealers.
“I’ve been around car dealers for a long tine and I have never seen them more excited or more optimistic about what’s going on,” Wolters said.
Wolters said that oil discoveries around the state – like the Eagle Ford Shale in South Texas – have injected money into the state’s economy.
“There’s ladies coming into dealerships with a 15-year-old car to trade in and a $50,000 check,” he said. “And they get that check every month. So their kids and their grandkids are going to be getting cars too.”
But Wolters cautioned that the state overall still has a ways to go before it returns to the heights of the pre-recession years.
In 2007, there were 1.39 million registered new vehicles sold in Texas, he said. That number dropped to 1.275 million last year, he said.
“And in that five-year period of time, we got 2 million new Texans,” he said. “So we still have a ways to go to get back to pre-recession sales numbers, and we have a significant number of new buyers in the state.”
Still, the uptick in new vehicle sales for 2013 is good news, Austin-area dealers said.
Mike Wilson, general manager of the Nyle Maxwell Supercenter in Austin, said his sales are up 12 percent this year compared to 2012.
Sales have been boosted by good reviews of the latest Dodge Ram pickup, which has drawn prospective buyers who normally don’t look at Rams, he said.
“Austin doesn’t have a big unemployment issue, and salaries and those kinds of things are fairly good,” he said. “So that has helped spur business. But with the quality of the product — that has helped me more than I think the economy has.”
At First Texas Honda, sales are up nearly 50 percent from last year – 1,400 through June compared to 936 during the same span in 2012, said Jim Olmstead, president of First Texas Honda.
Olmstead credited his dealership’s business plan, its new facility off Steck Avenue and an influx of new people moving to Austin.
“People are hiring and it just has that reverse effect (compared to) when people are laying off (employees) and they can’t find a job anywhere,” he said.
“Austin’s a great place for startups and the venture capital and we’ve just got so many good things,” he said. “We really are lucky to be where we are.”