Car Sales Start to Bounce Back, But Supply in Question - NBC San Diego

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As parts of San Diego reopen, car sales are starting to return to normal.

Although there was a large drop in the number of people visiting dealerships because of the coronavirus pandemic, some people are starting to buy cars, despite a potential shortage of popular new models.

"We went through a 10-week period were we were stalled," said JP Bo, a car salesman at Pacific Honda. "We didn't move any cars. Every dealer is desperate to sell cars at this point. It's an absolute buyer's market."

Bo, who has been working at the dealership for 35 years, said that dealers haven't been able to get as many new models as they have in the past.

"Inventory is low right now," said Bo. "The dealership usually has 400 cars. Now we have 275 cars."

That's because the pandemic also affected manufacturers. Many factories either had to stop production of cars entirely or drastically reduce the number of workers on-site.

"Those plants just can't be turned back on with a day or two notice," said Rick Borg, the Costco Auto Program general manager. "It's a long ramp-back-up period."

A May study by the San Diego Association of Governments (SANDAG), found the coronavirus pandemic had a big impact on local dealerships.

"Many auto dealerships were open with limited staff, modified hours and limited maintenance related service," according to the SANDAG report. "By April 5, auto dealerships saw [a] nearly 60 percent decline in foot traffic."

Since then, the number of people actively shopping at dealerships has gone up, but important parts of the process, like test drives, have changed. Bo said that, instead of taking a drive with a salesperson in the vehicle, prospective customers now have to sign a borrowed-car agreement and then drive the car by themselves.

"A guy like me used to sell cars with personality on the test drives," said Bo. "Hugging people, shaking their hands, all that kind of stuff. It's all different now."

Dealerships also rely on major holidays to boost their sales -- Bo said that Memorial Day was the start of the return to normal.

"It was like old times," said Bo. "I mean, 84 months at zero percent from Subaru, from all different dealers. The incentives brought people out."

Costco's Borg said that the prices aren't necessarily lower on new cars, but there are a lot of incentives that affect how much you pay in transaction fees and financing.

"Zero percent financing for five to six years, consumer incentives in addition to favorable financing," said Borg. "Manufacturers are doing their part."

Bo said Pacific Honda probably won't make its yearly sales goals but he's glad to see their sales picking up.

"There is big pent-up demand," said Bo. "It's exciting to be here again. It was not exciting for like 10 weeks. It was boring."

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