In a career that spans six decades, Robert Vail can recall the worst of times in the auto industry.
That was 2009, when General Motors Co., rescued from bankruptcy by the federal government”™s $24.9 billion bailout of GM and Chrysler early that year, began closing dealerships across the country. In Harrison, Vail”™s Chevrolet agency was shut down by the Detroit automaker, another victim of the Great Recession.
“That was probably one of the worst experiences in my life,” Vail said recently from his office at Vail Buick GMC in Bedford Hills, a dealership he has owned since 1991. “I let probably 20 employees go a couple weeks after our 27th anniversary” in Harrison.
The Harrison auto dealer also lost his Pontiac franchise in Bedford Hills that year after GM announced it would discontinue its Pontiac brand in 2010. Vail had started the Pontiac business in 1998 at the same location as his Buick GMC dealership.
“It”™s a new day,” said Vail, whose 25-employee Buick GMC franchise this month held a grand re-opening in its newly renovated building at 606 N. Bedford Road. The overhaul, required of dealers nationwide by GM, cost more than $1 million.
“We were really hampered by the construction for three months,” Vail said. Yet his company”™s sales are up 30 percent from the same period last year, driven by pent-up demand for GM product, which the dealer said is the best he has seen since he began selling GM vehicles in 1974.
At the Bedford Hills dealership, “2010 was a very strong year just coming off ”™09,” he said. GM reported $4.7 billion in earnings in the year after its federal bailout. “It kind of leveled off in ”™11 and ”™12 and this year we”™ve taken a jump ahead again.”
The industry”™s post-recession sales recovery is borne out in an economic impact report recently released by the Greater New York Automobile Dealers Association, a trade group representing about 400 franchised new car dealers in Westchester County, Long Island and the five boroughs. Vail serves as its vice chairman.
In the nation”™s largest vehicle sales market, metropolitan auto dealers saw $27.1 billion in sales in 2012, a 12.4 percent increase from 2010, according to the market research firm Auto Outlook Inc. The 429,000 new vehicles sold at retail in the metro area last year was an approximately 6.5 percent increase from 2010.
For the average dealership in the area, total sales in 2012 amounted to about $69.4 million, a 10 percent increase from 2010. The 1,900 new and used vehicles sold on average by area dealers amounted to a 5.6 percent increase from 2010.
Dealership payroll in this market averaged $5.12 million last year, a nearly 23 percent jump from two years earlier. The average dealership in the region had 83 employees last year, compared with 79 in 2010.
In Westchester, dealers employed 5,179 workers last year, according to the report. Employment in the county”™s auto showrooms, offices and service centers trailed that in Long Island”™s Nassau and Suffolk counties, where new vehicle dealers employed about 26,500 workers.
Vail”™s $1 million renovation project is part of an estimated $245.7 million in capital improvements that metro area dealers are projected to make this year, when their capital expenditures are expected to peak before dropping to an estimated $183.3 million in 2014.
The area”™s 390 dealers collected about $1.58 billion in state sales taxes in 2012 and paid $245.7 million in payroll, real estate and other taxes.
Nick Crispe, a spokesman for the 103-year old Greater New York Automobile Dealers Association, said the economic impact report “is an important reminder to residents and local officials of Westchester County and beyond just how important auto retailers are to the communities in which they reside. They employ a lot of people, invest hugely in the local community, provide localities with huge tax revenues and they are big charitable givers.”
The industry “is kind of like a family-type business,” Vail said in Bedford Hills. At Vail Buick GMC, the owner and president was joined in business nine years ago by his son Gregory, company vice president.
“For someone new to get in the business takes an awful lot of capital,” said the younger Vail, a Fordham University graduate who worked a few years at a Manhattan auditing firm before carrying his family”™s business legacy into a fourth generation. “It”™s capital intensive.”
“I”™m third generation in the car business,” said the senior Vail. “My grandfather started in Ossining with a Chevy dealership.” That was in 1918.
Vail entered the family business in the ”˜60s as a mechanic at the Ossining Studebaker dealership owned by his father and uncle, John and Peter Vail. For several years he sold GM”™s products as general manager at the former King Oldsmobile in Croton-on-Hudson.
In Bedford Hills, the Vails this year bought a used car annex at 536 Bedford Road to expand their business. That supplements a revived and thriving trade in new car leasing, which was halted by GM and other automakers during the industry”™s near-collapse.
“That hurt us tremendously during the recession,” Greg Vail said. “We”™re just coming back from that.”
The Vails said leasing this year accounts for 60 percent to 65 percent of new vehicle deals in their business. That is higher than average for the metro area, where leases accounted for 52 percent of sales last year.
“The Westchester-Fairfield (Conn.) market and Long Island is one of the highest leasing areas in the U.S.,” Bob Vail noted.
