style="width:522px;">

A visitor from Illinois walked into A.K. Durnin Chrysler recently and couldn't believe what he saw.

[ILLUSTRATION OMITTED]

Back home, he said, Chrysler's muscular new 300 sedan is in great demand but short supply. So Illinois dealers were asking $5,000 above the manufacturer's suggested retail price.

Supplies of the striking new sedan may not be up to snuff yet, but the sticker price in Baton Rouge reflects the fact that vehicle sales have been down here in recent years.

"He bought the car and drove it back up north," says Ferrell Spruell, general sales manager for AK Durnin. He is counting on excitement about the 300, as well as the PT Cruiser convertible and the redesigned Grand Cherokee, to invigorate sales in 2004.

For A.K. Durnin and a handful of other established dealerships, such an upswing can't come soon enough. A.K. Durnin, for example, reported a 23.3% drop in revenue.

The biggest decline was at Levis Mitsubishi, where total revenue was down 37.7% in 2003. Others reporting drops were Hollingsworth Richards Automotive, which was down 20.6%; Audubon Ford, down 13.5%; ET International LLC (Acura Infiniti), 6.4%; and Henderson Chrysler Jeep, 4.4%.

They were part of a national trend. Although total sales per dealership rose modestly nationwide in 2003, net pre-tax profits shrunk by 9.6%, according to the National Automobile Dealers Association.

However, some local dealerships did show handsome gains in 2003, some through acquisitions, others through stronger same-store sales. Among them: R.E. Coleman Inc., up 18.2%; Harris Chevrolet, 11.9%; All Star Automotive, 11.8%; and Diamond Mazda, 11.6%.

Growing same-store sales has been an unusually difficult job of late, says Eric Lane, vice president of Gerry Lane Enterprises, which managed a 1.8% gain in 2003.

"The market's been tough for the past three years, in part because of the war and uncertainty in the market," Lane says. "We've had to work a whole lot harder just to keep the business we have and get through the recession."

Car sales had thrived for several years in Baton Rouge, and historically such cycles always come to an end with a few lean years, Lane notes.

Lane says his family's dealerships managed to eke out an increase thanks in part to the fact General Motors rolled out 15 new and redesigned models in 2003, and plans 16 this year.

"General Motors in general has had people at the top making good decisions, and as a result GM was not hurt as bad as other makes," Lane says.

Gerry Lane added Hummer H2s to its line in 2003, and broke ground last week on its new Hummer dealership in South Baton Rouge near Siegen Lane and Interstate 10.

For most of the 1990s local car dealers enjoyed booming growth as sales rose every year. Record-low interest rates extended the streak. But not even record-low rates last year were enough to boost car sales at some local dealerships.

Downturns like this one are cyclical and inevitable, A.K. Durnin's Spruell says. At A.K. Durnin, a weak economy was combined with the dealership's decision in 2002 to phase out fleet sales, in which it might sell a large batch of sedans to a car rental agency or a fleet of Jeep Cherokees to the Baton Rouge Police Department.

That change marks a switch from volume to quality, Spruell says. A.K. Durnin now sells fewer cars, but more luxury and higher-end models, such as Chrysler's Town and Country van and the new 300 sedan, which starts at about $20,000 but goes all the way up to $40,000 loaded.

"We used to do a lot of volume, but now we look more at net profit," Spruell says. "With Chrysler and Jeep, we've gone a little more upscale--the cheapest car we have is a PT Cruiser or a Sebring."

Local dealers say they expect 2004 sales to improve over 2003.

A wave of new and redesigned vehicles will hit the market this year, which they hope will drive buyers into the showroom.

Even though A.K. Durnin has only had a few on the lot, more than a dozen Chrysler 300s have sold or presold, Spruell says. Sales will climb higher toward the end of the year, when he hopes to have at least 10 model 300s on the lot at any given time.

Also, Jeep will roll out its newly designed Grand Cherokee, which accounted for a boost when it was introduced in the late 1990s.

"This will be an upswing year for us," Spruell says.

Dealerships on the Top 100 list of 2004

 4  All Star Automotive
 5  Price LeBlanc
 8  Harris Chevrolet Inc.
 9  Gerry Lane Enterprises Inc.
13  Hollingsworth Richards Auto Group
16  Team Toyota/Honda
23  Salsbury Dodge City
25  Audubon Ford
29  R.E. Coleman
32  Robinson Brothers
52  ET International
57  Ralph Sellers Chrysler Dodge Jeep
58  Royal Nissan/Suzuki
68  Henderson Chrysler Jeep Inc.
77  Diamond Mazda
78  A.K. Durnin Chrysler Jeep
85  Iberville Motors
90  Levis Motors

TOM GUARISCO covers telecommunications and utilities, retail, oil and gas, and insurance. Reach him at tguarisco@businessreport.com.

COPYRIGHT 2004 Louisiana Business, Inc.
COPYRIGHT 2004 Gale Group