Car sales unaffected by recalls

AUSTINTOWN, Ohio (WKBN) — It has been a record-breaking year for auto recalls.

So far, manufacturers have recalled nearly 40 million vehicles. The impact on the economy could be enormous, starting at car dealerships.

Heading into the busy summer sales season, auto dealers were afraid the recent rounds of recalls rocking the auto industry would keep shoppers away from the showroom. But there is good news for dealers: They said so far their sales have been strong.

“From all indications, it has not had a significant impact,” said Steve Chos of the Auto Dealers Association of Eastern Ohio. “Overall, our totals of sales for the year have been increasing. We are up from last year.”

There are a couple factors leading to strong sales, such as financing deals, incentives and the fact that people hold on to cars longer.

“The industry right now has close to a 13-year scrappage rate. That means there are 13 years of worth of cars running the streets and probably half of those should not be. The scrappage rate should be down around six or seven years,” said Chuck Eddy, owner of Bob & Chuck Eddy Chrysler Jeep Dodge Ram Fiat in Austintown.

He said that leads to a strong market for dealers.

“So there is pent-up demand, the consumer needs to make a move. Yes, there is recall issues. Yes, there is safety issues that the recalls are taking care of. But at the same time, all of the product is very good,” Eddy said.

He sad the recalls might be because of increased scrutiny.

“It just shows that the agencies that govern this are very aware of quality in the product and safety in the product,” Eddy said.

That all adds up to strong sales for new car dealers.

Next week, analysts are expected to announce 16.4 million new car sales in June, which is an increase of more than 3 percent over last year.

 

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