Virgin Islands car dealers report strong inventories
Published: June 7, 2011
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ST. THOMAS - While the country faces shortages of new car models and parts made in Japan following the earthquake and tsunami, dealerships in the territory are holding their own.
"We haven't felt the effects at all," Bill Creque, general manager of Community Motors, said. "Basically, in terms of all the vehicles we have ordered, we've been able to receive 100 percent of our orders."
Last week, car manufacturers released their monthly sales figures, which indicated that a lack of vehicles contributed to a steep sales decline in May - the first monthly decrease this year.
IHS Automotive estimates that the U.S. has about 400,000 fewer cars in inventory than it should have.
Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book, expects prices to be high into the fall. Then a likely drop in gas prices and increases in Japanese production should bring them back to more normal levels. Honda said last week that its North American production will return to near-normal levels in August, while Toyota has said its Japanese production will be at 90 percent of capacity this month.
Toyota, Honda Motor Co. and Nissan Motor Co. all ran short of models because of parts shortages caused by the earthquake in Japan. The three companies saw declining sales from last May because of the shortages: Toyota was down 33 percent; Honda was down 23 percent; and Nissan was down 9 percent.
Pat Ragguette, sales manager of Toyota St. Croix, was not concerned. She said her dealership is fully stocked with 2011 models. In the worst-case scenario, she said, if they run out of certain models, they have other brands on which to fall back - Chrysler, Kia and General Motors.
Creque, who sells Honda, Acura and Suzuki on St. Thomas, said he has had no indication from those companies that his orders cannot be filled. He orders new vehicles on a monthly basis and orders four months in advance for cars coming from Japan. He said he already has placed orders for 2012 models and has not received any word that they will not be available.
Metro Motors General Manager Joe Annis said that despite the fact that he sells American brands, Ford and Lincoln, he has seen effects of the earthquake in Japan. He said one of Ford's most popular colors, tuxedo black, has been unavailable because the pigments needed for the paint are produced in Japan.
"But I have not seen anything that has changed it to where production will not be there," he said, referring to vehicles. "But that could change."
Creque said the recession has not made much of an impact in new car sales, but it has impacted the banks, which have tightened financing.
"Sales are good, if there were another source of financing, it would be even better," he said.
Lin Hendricks, manger of Hendricks International, which sells Honda and Acura vehicles on St. Croix, said sales have been slower than usual.
"The industry is not dead in the Virgin Islands, but it's definitely a lot slower than in the past," Hendricks said.
- Contact Aldeth Lewin at 774-7882 ext. 311 or email firstname.lastname@example.org. The Associated Press contributed to this report.