Rallying Yen's a big factor

Friday, January 06, 2012

MOTHER nature and the resurgent Yen combined to make 2011 a tough year for members of the Auto Dealers Association (ADA), president Kent LaCroix told Auto.

A 9.0 magnitude Tsunami devastated sections of east Japan in March, resulting in massive flooding in parts pf Thailand. LaCroix said those countries are the biggest source of business for the ADA's 19 members.

"The majority of our pick-ups come from Thailand and because of the Tsunami they weren't able to produce the magnitude of vehicles," he explained. "A lot of the parts for these vehicles are from Japan, so it was like a double-whammy."

The rocky period resulted in one key dealer, New Line Motors in Kingston, closing. LaCroix did not have a dollar figure as to how much the industry lost, but said the ADA members were still struggling at the end of 2011.

"We're definitely not back to 100 per cent. There's still some way to recovery," said LaCroix, who is also special projects manager at Stewart's Automotive Group.

The Japanese currency's improved showing against the US dollar also contributed to a challenging year, as with auto prices going up, dealers had to shell out more money to bring in stock from that country.

Things were not all bad, however. LaCroix reported a 35 per cent increase in the number of vehicles sold with sports utility vehicles showing the strongest sales at 45 per cent.

LaCroix, who was elected to an eighth straight term as ADA president in July, says the performance of the Yen will be a factor in if the industry makes a solid recovery in 2012.