Business

Car sales down as winter continues to take its toll

Cars and snow filled the lot at Colonial Volkswagen in Medford.
Joanne Rathe/Globe Staff
Cars and snow filled the lot at Colonial Volkswagen in Medford.

Ken Cataldo can usually move a lot of Volkswagens in February — 120 in a normal year, maybe 130 if the economy is humming and his sales team is feeling it.

But this month, with just nine days left on the clock, Colonial Volkswagen of Medford had sold 37 cars.

“Literally, there’s nobody,” said an exasperated Cataldo, general manager of the dealership. “I’ve never seen anything like it. This has been the worst two weeks of my life.”

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Cataldo and other car dealers across Massachusetts said new car sales and repair business have plunged this year, as snow-weary drivers put off buying new rides until spring. Cruelly, the latest blizzard hit over Presidents’ Day weekend, which dealers use to launch the sales season by offering steep discounts. Instead, customers were stuck at home, and salespeople spent the holiday weekend rearranging car lots to make way for plows.

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“It’s very important psychologically, because it gets people out of the winter doldrums and into a spring-like mindset. Obviously, that didn’t happen this year,” said Robert O’Koniewski, the executive vice president of the Massachusetts State Automobile Dealers Association.

Colonial Volkswagen usually sells 30 cars on Presidents’ Day, then four or five cars each day the following week as salespeople finalize deals with stragglers who browsed over the weekend. This year, it sold 18 cars on Presidents’ Day, and only a handful the following workweek.

Consumers cited a number of weather-related reasons they are putting off buying cars. Alan Brandon, a 49-year-old technical writer from Pepperell, said he was looking forward to Presidents’ Day deals to buy a new Ford Escape that got better gas mileage than his current vehicle. Last weekend’s storm spoiled that plan, and now he’s waiting for the weather to improve before heading to a dealer.

“I don’t really want to stand around in the parking lot and haggle if it’s sleeting or something,” he said. “Besides, with the snow banks up here, it would be hard to even turn out of the lot for a test drive.”

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Brandon said he also worried about immediately scratching up a brand-new car with an ice scraper, or smashing its bumper into a snowbank while parking, or tracking muddy snowmelt onto its spotless carpets.

Even the state’s largest chains are struggling. Herb Chambers, who runs 55 dealerships across Massachusetts, said he expected sales this month to be up 10 percent over last year. Instead, sales are down 20 percent. He has spent more than $1 million clearing snow from car lots and roofs. Also, Chambers is paying workers to stay for more hours so they can catch up on repair jobs and help clean up after storms.

“It’s terribly disappointing. We’ve lost a huge amount of money,” Chambers said. “Luckily, it has nothing to do with the industry. I believe we’ll make up the sales. The thing we won’t make up is the cost of snow removal.”

Cars and snow filled the lot at Colonial Volkswagen in Medford, which is still advertising its holiday sale event.
Joanne Rathe/Globe Staff
Colonial Volkswagen in Medford is still advertising its holiday sale event.

One upside for dealers is that most consumers are like Brandon — they buy cars after deciding they definitely need one, so the business lost this winter may come back in the spring.

But that delay comes with a price tag: All but the largest chains take out loans from banks or manufacturers to buy their inventory of vehicles, paying financing fees for each day a car sits unsold on their lots. And with many manufacturers extending Presidents’ Day sales another week or two because of the snow, dealers are also spending more on advertising to notify shoppers of the additional sale dates.

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“We spent a tremendous amount of money on TV ads and direct mailings this month, and it’s too late to get out of that commitment by the time you see the forecast,” said Scott Dube, president of Bill Dube Hyundai in Wilmington. “Maybe we’ll eventually satisfy the pent-up demand in March or April, but we’ll have to spend just as much on ads to attract people then. Now, we’ve spent double the money for the same result.”

Dube said business at his service department is down by half. Customers have even been canceling appointments scheduled for the day before a storm. And because his customers are already missing work due to the weather, they are reluctant to take more time off for rescheduled service appointments. Dube said each one-day storm can quickly become three days of lost productivity and business.

Add to that the expense of clearing and sanding his lot, along with the challenge of keeping morale high among employees who depend on commission, and February is shaping up to be a tough month.

“It’s death by a thousand papercuts,” Dube said. “I’ve been buying [employees] lunch, trying to keep everyone’s head in the game, but it’s hard to stay jazzed when you’re shoveling out cars and not making any money.”

More coverage:

Panel to examine MBTA woes

How to deal with ice dams

Vehicle sales down in winter

Cold reduces devices’ battery life

Finding artistic inspiration amid the cold and snow

Dan Adams can be reached at daniel.adams@globe.com. Follow him on Twitter @DanielAdams86.