New-car registrations in Colorado dropped by 28 percent last year — the largest decline in a decade — but the reasons are varied and not as obvious as pinched buyers simply holding on to cash.
To be sure, analysts say, the credit squeeze has been a factor, contributing to the shuttering of 15 dealerships statewide.
“A typical year would be two to four dealership closures,” said Tim Jackson, president of the Colorado Automobile Dealers Association.
Among the less-publicized reasons for the decline in sales: Better car quality and longevity mean drivers are holding on to their vehicles longer. Vehicle life spans are almost double what they were two decades ago, some studies show.
Despite those trends, CADA and other organizations expect 2010 will bring higher sales. They note that new registrations started climbing in the last quarter of 2009 after bottoming out earlier in the year. Meanwhile, pent-up demand is at record-high levels, the economy is rebounding, and car affordability has stayed strong.
According to Colorado Auto Outlook, a publication analyzing the car industry, the surge this year could surpass 14 percent.
“The market should have little trouble showing relatively big gains in the first half of the year versus depressed sales a year earlier,” according to Outlook’s January publication.
Among the biggest surprises in sales trends released this month? The 50 percent decline in new-vehicle registrations in Colorado and metro Denver between 2000 and 2009.
“That’s a jaw-dropping number,” Jackson said. “We were one of the fastest-growing states in the country, growing (population) by 13 to 15 percent. We should have been selling cars. But the No. 1 factor that flies in the face of the headlines today is the significantly improved new-vehicle quality. The average age of the fleet driving down the highway is nine years, compared to five in the ’70s and ’80s.”
Miles Moffeit: 303-954-1415 or mmoffeit@denverpost.com
