Monday Report
Utah Auto Dealerships at Risk December 8th - 2008


Utah Economic Snapshot

Global Landscape Forecast 2020

Economic Notes:


 

SCORECARD

Where Do Car Dealerships Go When They Die?

As many as 700 new-car dealerships will close in 2008. Last year, 430 dealerships shut down. The financial crisis is partly to blame, as new-car sales have dropped to a 25-year low.

But there are other forces at work. The number of car dealerships has been shrinking more or less constantly since 1990. In fact, car dealerships have been disappearing steadily since 1947, when their numbers peaked at around 47,000 nationwide. By the end of 2008, the National Automobile Dealers Association estimates that just 20,000 will remain.

Consolidation is the real driving force. In 1947, most car dealers carried just one brand - Packard or Studebaker, for example. Now, the average dealership carries two. So the number of car dealerships isn't likely to rebound with the economy, as consolidation continues in good times and bad.

Where do new-car dealerships go when they die?

About 17 percent of the 590 new-car dealerships that closed so far this year have reopened as used- car dealers.

That still leaves hundreds of abandoned showrooms with flat-open lots, well served by utilities and along major arterial streets (Think State Street and Redwood Road).

Who can you think of a better use for them?

Source: Freakonomics


New Passenger Vehicle and Light Truck Sales by Dealer - Third Quarter 2008

Total
RankDealershiptotal Units Sold Qtr.3.08
1HINCKLEY DODGE CHRYSLER JEEP INC.754
2LARRY H. MILLER CHRYSLER JEEP DODGE541
3MARK MILLER TOYOTA538
4LARRY H. MILLER TOYOTA SUPERCENTER489
5KARL MALONE TOYOTA461
6TONY DIVINO451
7KEN GARFF HONDA DOWNTOWN421
8MENLOVE TOYOTA SCION419
9BRENT BROWN TOYOTA409
10KEN GARFF WEST VALLEY CHRYSLER JEEP DODGE407
11KEN GARFF OGDEN, LLC388
12STOCKTON TO MALONE HONDA374
13YOUNG CHEVROLET COMPANY358
14DOUG SMITH AUTOPLEX, INC.331
15LARRY H. MILLER HONDA324
16STEPHEN WADE AUTO CENTER291
17CHAMPION FORD278
18TIM DAHLE NISSAN OF SANDY272
19KEN GARFF DOWNTOWN263
20MURDOCK HYUNDAI LLC259
21JERRY SEINER254
22JERRY SEINER BUICK PONTIAC GMC,INC.249
23TIM DAHLE NISSAN244
24WILLEY HONDA240
25BMW OF MURRAY235

Source: Utah State Tax Commission, December 2008.


Who are selling the fewest New Cars?

New Passenger Vehicle and Light Truck Sales by Dealer - Third Quarter 2008 - 60 or Fewer Units

  • 1ST CHOICE AUTO, INC.
  • AUTO MART LLC
  • BARBER BROTHERS FORD, INC.
  • BARBER BROTHERS MITSUBISHI
  • BLAINE JENSEN & SONS RV CENTER
  • BOUNTIFUL LINCOLN MERCURY
  • BRADSHAW CHEVROLET COMPANY, INC.
  • BRENT BROWN FORD LINCOLN MERCURY, LLC
  • BRYSON SALES AND SERVICE, INC.
  • C&R MOTORS
  • CARMAX
  • CLASSIC MOTORS INC.
  • CLEARWATER LEASING
  • CLIFFORD MOTORS
  • CRANDALL FORD MERCURY
  • CROSSROADS, INC.
  • CRUMPS PONTIAC CADILLAC GMC
  • CUTRUBUS SUZUKI OF LAYTON
  • DAVE STRONG'S PORSCHE
  • DAVIS AUTO CENTER
  • DAVIS CHRYSLER DODGE, INC.
  • DOLLAR RENT A CAR
  • DOWNTOWN DODGE INC
  • DROUBAY CHEVROLET GEO OLDS PONTIAC BUICK
  • ELLIS-ROBINSON MOTORS LLC
  • ENSIGN AUTO, LLC
  • ENTERPRISE RENT A CAR COMPANY OF UTAH
  • EXECUTIVE CAR SALES, INC.
  • FINDLAY HYUNDAI
  • FIRMAGE BMW OF PLEASANT GROVE
  • FIRST CHOICE CARS
  • FORSHEE AUTO SALES,INC.
  • FREEDOM FORD MERCURY INC
  • FREEWAY OLDSMOBILE CADILLAC MAZDA
  • HARVEY AUTOMOTIVE,LLC
  • HEINZ R.V.
  • HIGH COUNTRY AUTO CENTER, INC.
  • HIGHLAND GOLF
  • INTERMOUNTAIN, INC.
  • INTERNATION ARMORING CORP
  • JORGENSEN CHEVROLET, PONTIAC, BUICK, GMC TRUCK
  • JORGENSEN FORD MERCURY, INC.
  • JORGENSEN'S INC
  • K.S. AUTO WORKS, INC.
  • KEN GARFF MITSUBISHI
  • KEN GARFF VOLVO SOUTHTOWNE
  • LABRUM CHEVROLET PONTIAC & BUICK, INC.
  • LAKE CITY
  • LAND ROVER AMERICAN FORK, INC.
  • LAND ROVER CENTERVILLE, INC.
  • LARRY H. MILLER LEXUS OF LINDON
  • LARRY H. MILLER SUPER FORD
  • LARRY H. MILLER USED CAR SUPERMARKET BOU
  • LAYTON HILLS DODGE
  • LEGACY MITSUBISHI SUZUKI
  • LEGACY SUBARU MITSUBISHI
  • LESS STRESS AUTO, INC
  • LEWIS TRANSPORTATION SALES
  • LONESTAR AUTO SALES, LLC
  • LUNT MOTOR COMPANY
  • M.C. AUTOBODY & PAINT
  • MARK MILLER PONTIAC, INC.
  • MAW EQUIPMENT, INC.
  • MCFARLAND FORD MERCURY
  • MIKE HALE CHEVROLET, INC.
  • MIKE RIDDLE MITSUBISHI
  • MOAB CHEVROLET
  • MOAB FORD
  • MOBILITY SOLUTIONS, INC.
  • MOTOR SPORTSLAND,INC
  • MOUNTAIN WEST TRUCK CENTER
  • MURDOCK CHEVROLET BUICK, LLC
  • NATIONAL CAR RENTAL
  • NORTHSTAR TRAILER
  • PAINTER MOTOR COMPANY, INC
  • PAINTER SALES & LEASING, INC.
  • PAINTER'S SUN COUNTRY CHRYSLER
  • PARK CITY CHRYSLER JEEP DODGE, LLC
  • PARKWAY MOTORS
  • PEOPLE'S CHOICE CARS
  • PRICE AUTO GROUP, LLC
  • PRICE AUTO SALES & SERVICE
  • QUALITY CHEVROLET
  • QUALITY DODGE
  • QUALITY FORD
  • RASMUSSEN EQUIPMENT CO.
  • REDWOOD DISCOUNT AUTO OUTLET
  • RENEGADE SPORTS
  • ROBERT H. HINCKLEY, INC.
  • ROCKY MOUNTAIN CHRYSLER PLYMOUTH
  • RUSS CARRIGAN MOTORS, INC.
  • S & M FINANCIAL, LLC
  • SAHARA MOTORS, INC.
  • SATURN OF OREM
  • SATURN OF RIVERDALE
  • SATURN OF ST. GEORGE
  • SHOWALTER MOTOR COMPANY, INC.
  • SMITH AUTO COMPANY
  • SPENCER AUTO SALES
  • STEADMAN'S RECREATION, INC.
  • STEVE HARRIS IMPORTS, LTD.
  • SUNLAND SALES & LEASING
  • TAB'S TRUCKS
  • TAYLOR AUTO SALES
  • TEREX UTILITIES INC
  • THE CAR PLACE INC.
  • TISCHNER FORD SALES, INC.
  • TRIPLE L AUTO SALES AND LEASING
  • TRI-STATE MOTORS
  • WARNER TRUCK CENTER
  • WASATCH AUTO BROKERS
  • WASATCH FRONT
  • WASHBURN MOTORS AUTO SALES, INC.
  • WEESE MOTORS
  • WRIGHT FORD

Source: Utah State Tax Commission, December 2008.


Greetings!

Utah Auto Dealerships

Detroit talks about reducing brands and dealerships!

Sales Taxes from New Car Dealers are a major souce of most cities revenues.

  • Who is Strong?
  • Who is at Risk?

Utah Economic Snapshot

Global Landscape Forecast - 2010

Economic Notes


  • Utah Economic Snapshot
  • Utah Labor Market Indicators - October 2008

    • Employment Growth: -0.2%
    • Employment Increase: 1,264.5
    • Unemployment Rate:
      • October 3.5%
      • September 3.5%
      • August 3.7%
      • July 3.5%
      • June 3.3%
      • May 3.2%
      • April 3.1%
      • March 3.3%
      • February 3.0%
      • January 2008 3.0%
      • December 2007 2.9%
      • November2007 2.8%

    Who are gaining jobs? October - 2008

    • Education and Health + 5,800 (+4.1%)
    • Trade, Trans, & Utilities + 3,500 (+1.4%)
    • Government + 3,300 (+1.5%)
    • Leisure & Hospitality + 1,800 (+1.6%)
    • Natural Resources + 900 (+7.7%)
    • Prof & Business + 700 (+0.5%)

    Who are losing jobs? - October 2008

    • Construction - 13,400 (-12.8%)
    • Manufacturing - 1,800 (-1.4%)
    • Financial Activities -1,200 (-1.6%)
    • Information - 600 (-2.1%)
    • Other Services - 300 (-0.9%)

    Source: Utah Dept of Workforce Services, 12/02/08


  • Global Landscape Forecast 2020
  • Relative CertaintiesKey Uncertainties
    Globalization largely irreversible, likely to become less Westernized.Whether globalization will pull in lagging economies; degree to which Asian countries set new "rules of the game."
    World economy substantially larger.Extent of gaps between "haves" and "have-nots"; backsliding by fragile democracies; managing or containing financial crises.
    Increasing number of global firms facilitate spread of new technologies. Extent to which connectivity challenges governments.
    Rise of Asia and advent of possible new economic middle-weights.Whether rise of China/India occurs smoothly.
    Aging populations in established powers.Ability of EU and Japan to adapt work forces, welfare systems, and integrate migrant populations; whether EU becomes a superpower.
    Energy supplies "in the ground" sufficient to meet global demand.Political instability in producer countries; supply disruptions.
    Growing power of nonstate actors.Willingness and ability of states and international institutions to accommodate these actors.
    Political Islam remains a potent forceImpact of religiosity on unity of states and potential for conflict; growth of jihadist ideology.
    Improved WMD capabilities of some states.More or fewer nuclear powers; ability of terrorists to acquire biological, chemical, radiological, or nuclear weapons.
    Arc of instability spanning Middle East, Asia, Africa.Precipitating events leading to overthrow of regimes.
    Great power conflict escalating into total war unlikely.Ability to manage flashpoints and competition for resources.
    Environmental and ethical issues even more to the fore.Extent to which new technologies create or resolve ethical dilemmas.
    US will remain single most powerful actor economically, technologically, militarily.Whether other countries will more openly challenge Washington; whether US loses S&T edge.


    Source: Office of the Director of National Intelligence Washington DC, December 2008.

  • Economic Notes:
    • International Business Confidence
    • Global business confidence slumped again to a new record low last week. Responses to questions regarding sales strength, hiring, inventory and equipment investment, and expectations regarding the outlook six months hence have never been as weak. Pessimism is pervasive across the entire globe, with the only distinction being that Asian businesses are somewhat less nervous than elsewhere. The global economy is suffering a severe recession according to the business confidence survey results.
    • Productivity and Costs
    • There was a small upward revision to productivity in the third quarter and large downward revisions to unit labor costs in both the second and third quarters. Weaker unit labor costs can be traced to much weaker growth in labor compensation than previously reported. The results suggest that businesses have been more proactive in their response to weakening growth, cutting labor quickly in response to weaker demand as they attempt to preserve profitability.
    • Factory Orders (M3)
    • Factory orders declined 5.1% in October, nearly matching Moody's Economy.com expectations for a 5.2% drop. The decline followed a 3.1% drop in September and was the third decline in a row. The decline in durable goods orders was revised lower to show a 6.9% decline and nondurables orders fell 3.4%. Shipments were down 3.2%, including another downward revision to previously-published durable goods shipments. Both unfilled orders and inventories fell 0.6% over the month.
    • Construction Spending (C30)
    • Construction spending for October came in at $1.073 billion, a 1.2% decline from the revised September total of $1.086 billion, and down by 4.6% compared with one year ago. The decline was in private residential and nonresidential construction spending and was not fully offset by a moderate increase in public construction spending. The decline is about the same as expectations and highlights the continuing tightness in credit and the decline in developers' confidence as the recession in the U.S. unfolds.
    • Semiconductor Billings
    • Global semiconductor sales fell 2.1% in October to $22.5 billion on a three-month moving average basis. This growth is considerably weaker than typical seasonal trends. Sales for the first ten months of 2008 were 2.6% higher than last year, with all gains coming from sales to the Asia-Pacific region. If not for falling memory chip prices, annual growth would be much stronger.
    • Major Job Cuts
    • The number of announced job cuts surged in November to 181,671, up from 112,884 in October. Half of the announced cuts were in financial services. Year to date, cuts exceed one million, of which 220,506 have been in the financial services.
    • Jobless Claims
    • Initial claims for unemployment insurance benefits decreased by 21,000 to 509,000 for the week ending November 29. This was well below expectations, though the drop may be due to volatility associated with the Thanksgiving holiday. That said, claims remain very elevated and suggest a weakening labor market.
    • Monster Employment Index
    • The Monster Employment Index shed 7 points in November, extending last month's sharp contraction in online recruitment advertising. The index fell 22% from a year ago in November, accelerating slightly from October's 20% year-ago rate of decline. The decline was broad-based geographically and among industries; only one of the 20 industries tracked recorded an increase in job availability between October and November. The more rapid decline in the index foreshadows another poor employment report for November.
    • MBA Mortgage Applications Survey
    • In the week ending November 28, the MBA composite market index spiked, leaping 112.1% to close the week at 857.7. The refinance index tripled over last week. It rose to 3,802.8, up 203.3% for the week. The purchase index 'only' increased 38% to 361.1. Both the market and refinance indices closed above year-ago levels, propelled by a 50-basis point fall in the FRM contract rate.
    • Chain Store Sales
    • Consumers cut back severely in November despite decent Black Friday spending. Chain store sales fell 2.7% for the month according to the ICSC, worse than expected despite a strong performance by Wal-Mart. Excluding Wal-Mart, sales tumbled 7.7%. Gasoline prices became a drag on sales for the month, undermining sales at warehouse clubs. The few bright spots were discounters who sell food.
    • Agricultural Prices
    • The November preliminary all-farm products index of prices received by farmers decreased 7.9% from October. The crop index dropped 9.5% while livestock prices declined 1.6% from last month. The overall index is now slightly below its level of a year ago. Certainly, seasonal harvest pressure contributed to lower prices for grains and oilseeds. Soybeans, corn, lettuce and hogs fetched lower prices while tomatoes, potatoes, cucumbers and cantaloupe prices moved higher. The food commodities index fell 6% in the month and is now 5% lower than a year ago, an indication that the steady decline in food commodities at the farm gate will lead to reduced consumer food price inflation in coming months. The index of prices paid by farmers for the means of production fell 4% over the month.
    • Oil and Gas Inventories
    • Crude oil inventories fell by 400,000 barrels during the week ending November 28, according to the Energy Information Administration, falling short of expectations of a 1 million barrel build. Gasoline inventories fell by 1.6 million barrels, more than an expected 900,000 barrel decline. Distillate supplies fell by 1.7 million barrels, surpassing expectations of a 300,000 barrel decline. Refinery operating capacity fell sharply to 84.3% from 86.2%. Total domestic petroleum demand rose, building on last week's increase. This report points to higher oil prices.
    • Natural Gas Storage Report
    • Working gas in underground storage decreased by 64 billion cubic feet during the week ending November 28. The consensus estimate was for a draw of 69 billion cubic feet.

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