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From jobs to tax revenues, the automobile industry is a driving force in Utah's economy. But the state's auto dealers have hit a skid and are urging lawmakers in Washington to prevent the crash of the "Big Three" in Detroit.
Utah has seen a 26 percent drop in the number of new cars sold so far in 2008, when compared with last year.
New car sales equal roughly $3 billion of consumer spending annually, generating about $135 million in state tax revenues. So, if sales are off by a quarter, that's a loss of tens of millions in taxes that run state government.
"The Big Three manufacturers not getting some financial help has a potential devastating effect not only in our industry, but the state as a whole. This is big stakes stuff. It's a big impact here," said Craig Bickmore, executive director of New Car Dealers of Utah.
Interestingly enough, car dealers say what is driving down auto prices is not really a credit problem now, it's more about consumer confidence. They say there is money available for people to borrow, but customers are anxious.
For some perspective, we talked with Mark Miller, whose auto group includes Toyota, Subaru and Scion, and Buick and Pontiac, which are made by General Motors.
Miller says the loss of GM would be catastrophic. "It's our business. If GM goes out of business, that's a dealership that's been in business since 1953; that's 65 employees just in our one store," he said.
The flip side is that dealers have lots of inventory and are motivated to sell. Also, the manufactures are offering plenty of incentives. "I've been doing this for 30 years. I've never seen a better time to buy a new car," Miller said.
In terms of retail sales, new car sales are the No. 2 major economic sector in Utah, employing 8,000 to 10,000 people. So, everyone in the industry is watching Detroit and Washington carefully.
E-mail: jdaley@ksl.com
