January vehicle titles 2nd most in 5 years

— There were 10,074 new vehicles titled in January in Arkansas, the second most in the past five years behind only May 2012, when 10,170 were registered, said Cross-Sell of Lexington, Ky., a company that provides market analysis for the automotive industry.

January’s titles were 46 percent more than the 6,895 registrations in January 2012, according to the firm, which began supplying Arkansas vehicle registration information in 2008.

The big jump in registrations is an anomaly, said Dennis Jungmeyer, president of the Arkansas Automobile Dealers Association. January is normally a slow month for sales, Jungmeyer said Wednesday.

“I can’t think of any compelling reason that there would be that much difference,” Jungmeyer said. “As a matter of fact, there were probably fewer rebates and incentives [in January] than a year ago.”

A reason for the significant increase in titles might have been the snowstorm that affected much of the state in the last week of December, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock. Many auto buyers in December may have waited until January to register their cars, Pakko said.

January’s titles were surprisingly strong, Pakko said.

“Last month, I had expected the double-digit increases [in registrations] to start to level off,” Pakko said. “We’ve largely recovered from the steep decline of the recession. But you’d expect over time that we wouldn’t continue to see these very rapid increases.”

The state saw double-digit percent increases in auto registrations in 20 of the 24 months before January, with the biggest increase being 57 percent in February 2012. Registrations were up only 8 percent in December.

Nationally, about 1.1 million vehicles were sold in January, a 15 percent increase from January 2012, according to estimates by TureCar.com.

Most Arkansas new car dealers continue to be profitable, Jungmeyer said.

“There is a lot of pressure from manufacturers on facilities upgrades,” Jungmeyer said. “From the dealers’ perspective, you’ve got to look at the return on investment. If you spend $1 million to upgrade a facility, is that justifiable? How long is it going to take to get that back? It’s a contentious issue between dealers and manufacturers.”

Jungmeyer is optimistic about the future.

“Here in Arkansas, we continue to have great reports,” he said. “Used car sales are strong. And we haven’t lost a dealer in almost two years.”

In 2009, about 25 Chrysler and General Motors dealers in Arkansas had their franchises taken away by the two manufacturers. Another 20 or so closed in 2008 to 2010 because of the weak economy.

There were 12,392 used vehicles registered in January after sales by auto dealers, up 38.6 percent from January 2012, Cross-Sell said. An additional 20,579 used vehicles were titled in January in private party deals, up 29 percent from 12 months earlier, Cross-Sell said.

Totals for vehicle titles aren’t a precise comparison to vehicle sales from monthto-month because Arkansans are allowed 30 days to register their cars or trucks after purchasing them. So January titles represent, for the most part, sales in December.

Business, Pages 25 on 02/28/2013

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