Car sales revving up in Minnesota

The 40th annual Twin Cities Auto Show is underway at the Minneapolis Convention Center. Crowds of people come to admire the pristine new vehicles, many with dreams of owning one.

But this year more visitors are likely to put their money where their dreams are. New car and truck sales have been on the upswing.

Within a half-hour of opening last Saturday, the auto show drew more than 10,000 people.

"I've never seen the auto show this crowded, this early," said Joe Liedl of Maple Grove. "I must not be the only one thinking about buying a car."

Liedl was hunting for a small SUV to replace his ten-year-old Ford Expedition, with nearly 100,000 miles on it.

"I think everybody has some trepidation about strapping themselves into long-term payments," Liedl said. "You're either going to pay deprecation or you're going to pay maintenance. And I guess I'm crossing over to wanting to pay depreciation and not pay maintenance."

Some people, still uncertain about which payments to make, carefully weighed their needs and wallets -- and the prospect of shelling out $20,000 to $30,000 or more for a new vehicle.

"I think everybody has some trepidation about strapping themselves into long-term payments... You're either going to pay deprecation or you're going to pay maintenance."

Jason French of Mounds View hunted through the more than 450 vehicles on display for something more spacious for his family.

"It's more of a dream," French said, citing finances as his reason for holding back.

But count his wife, Sarah French, in the buyer category.

"I think we will be getting a new car within the next year," she said.

Buyers are turning out in force. New vehicles sales in Minnesota have steadily increased since 2009, when sales bottomed out at fewer than 120,000 cars and trucks. The Minnesota Automobile Dealers Association estimates sales last year topped 180,000.

"Our industry led into the recession," said Scott Lambert, association president. "We were one of the first into the recession. And I think we're one of the first industries to come out of the recession."

Or at least start to come out.

The recession and the subsequent struggles of domestic and foreign auto manufacturers hit Minnesota dealers and their employees hard. Since 2007 about 60 dealerships and 3,000 related jobs have disappeared.

Lambert said improvement in the economy, especially in the housing sector, is helping car dealers.

"The contractors, the people in that industry, they go through our product at a pretty hard pace," he said. "And we need them to buy product."

More people are deciding it is time to retire their old cars, Lambert said. He said the average age of cars on the road in the U.S. has grown to 11 years.

"Eventually, it's just time for a replacement," he said.

Low interest rates, the rising stock market and aggressive manufacturer marketing efforts are also encouraging more people to buy cars.

Things are looking up for dealers and car buyers, like those shopping here at Paul Walser's Bloomington Toyota dealership. Walser has been in the auto business for some 40 years.

"We're clearly on a good path now," Walser said. "There has been a resurgence in customer interest. The show floors are busier. We're selling a lot more cars."

Walser emerged from the industry's deep funk with more locations and more sales. But with tighter margins as consumers use the Internet to find the best deal.

"Much, much smaller margins. The new cars are being sold for almost what you own them for," he said.

With trade-ins, Walser's dealerships are seeing more cars that people have been able to nurse into old age. Many have more than a couple of hundred-thousand miles on them. But dealers are glad to take in aging autos if it means a sale.

The auto show runs through Sunday.

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