Car Sales Strong in Sac Region, Including Elk Grove

When we got a press release from Elk Grove Ford earlier this month touting larger-than-expected revenue at the newly-reopened dealership, we thought perhaps it was typical company PR spin.

Then we saw this article in the Sacramento Bee over the weekend, explaining that the Sacramento region is among the top metropolitan areas in the country for new car sales—despite high unemployment. Growth in new car sales was 22 percent last year, according to the Bee, behind only Atlanta and Phoenix.

Why are so many locals forking over hard-earned cash for new vehicles in this economic climate? The Bee's sources say customers that have been holding on to older cars can no longer afford to maintain them, and that juicy incentives and low interest rates have helped lure buyers.

Elk Grove Ford reports that in just eight months, the dealership surpassed its goal for the year of hiring 60 workers, and now has over 80 employees. Elk Grove Nissan also saw a 23 percent increase in new car sales in the first seven months of 2011 compared with 2010, owner John Driebe told the Bee.

The Elk Grove Auto Mall has been a major focus of the city's economic development efforts. The city helped seal the deal to with $500,000 in incentive money, after the dealership closed down in 2008. City council members to fund an advertising campaign for Elk Grove Mazda, and will consider a similar subsidy for Elk Grove Subaru at its meeting on Wednesday.

City spokeperson Christine Brainerd declined to say how much the city has reaped in sales tax revenue from its investment in Elk Grove Ford, but said the amount "is exceeding [the city's] expectations as projected at the time of the incentive agreement."

We're just intrigued that even in an era of belt-tightening, consumers—at least around here—still have their hearts set on a new set of wheels.