Local car dealers react to possible auto bailout - WMC Action News 5 - Memphis, Tennessee

Reported by Justin Hanson

Local car dealers react to possible auto bailout

COVINGTON, TN (WMC-TV) - The U.S. House of Representatives passed a bill earlier this week to bail-out America's auto industry, but now some Senate Republicans are trying to kill it.

The rescue plan offers $14 billion in federal loans to the "Big 3" automakers.  The sticking points include tougher standards for car emissions, and concerns the so-called 'car czar' would not have enough power to ensure GM, Chrysler and Ford would get back on their feet.

Whatever lawmakers decide -- it will affect millions -- including workers and families in the Mid-South.

Despite these tough economic times, local car dealers say they are definitely still in business.

As hundreds of cars stack up on local car lots, some small town car dealers say the auto bailout isn't something they think about.

"We still got to answer to the manufacturer in some fashion but we still have to serve Tipton and North Shelby counties," said Covington car dealer Hank Sampson. 
 
At Country Chevrolet in Covington, new car sales are down about thirty percent from last year. But despite that, dealers say now is the time to buy.

"Got a lot of new products...got a ton of inventory ... huge rebates from the factory...has is the cheapest its been in the last six months," Sampson continues.

"Not quite as many tire kickers, but the people that come out in this time are serious buyers," says car dealer Daniel Allen.
 
Oftentimes, car dealers are a huge contributor back to their local communities. But with more customers buying used, car dealers have less money to give back.
 
"As far as whether or not we're going to spend as much money as we did last year...we're going to try to do all we can do," Sampson continues.

In Covington, sales tax collections are down year to date about 2.2 percent, and officials say car dealers like this are a large contributor to those sales tax collections.

"Business is good but business is slow," adds Allen.
 
In the face of a 30 percent decrease in car sales, King Cotton recently expanded its Chrysler dealership by purchasing another big three auto dealership. 
 
"We have bought into this and we're not going anywhere," says Allen.
 
And even with the sagging economy, these car dealers say they're in it for the long haul.

These small town dealers say the customers who do stop on their car lots are being extremely cautious and spreading their dollar as far as they can.


Click here to send an email to Justin Hanson.

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