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Auto industry sees increase in sales of vehicles for companies' use

In a sign of economic recovery, sales of large pickup trucks and cargo vans — the types of vehicles used by construction companies and small businesses — are at their highest level in more than two years.

The economy has improved to the point where small-business owner Mark Dalessi of Sunwest Air Conditioning in Costa Mesa, Calif., felt comfortable enough to spend nearly $50,000 on two new Chevrolet Silverado trucks.

For much of the past two years, Dalessi said, he "cut back on all unnecessary expenses." If he had a problem with one of his nine trucks, "I would Band-Aid it."

With business improving and one truck passing the 250,000-mile mark, he decided in late November to replace one — and wound up buying another in December.

Other small-business owners are also getting back into the truck market.

Automakers sold nearly 411,000 large pickups and cargo vans in the last quarter of 2010, up 24 percent from the same period in 2009, according to auto information company Edmunds.com. It was the best showing since the industry sold more than 491,000 such vehicles in the third quarter of 2008.

Truck body companies say they are also seeing a pickup in orders for custom boxes and beds built for trucks used by plumbers, electricians and those in other trades.

Sales of trucks and service vehicles to small businesses is an important marker for the economy, said Ken Goldstein, economist at the Conference Board, a business trade group.

"This confirms what's going on in the economy," he said. "The economy had to pick up enough so that these plumbers and electricians had enough business coming in to put out this type of money to replace vehicles."

The vehicles, which typically have custom boxes special to particular trades, are among the largest expenditures these companies make.

Rising sales are helping create jobs at custom body shops.

General Motors Co. said sales of its Chevrolet brand vehicles have increased for three consecutive quarters, and rose 54 percent in December.

Although sales of vehicles used by tradespeople and small businesses were stronger than those for the rest of the auto industry in recent months, some of the gains are the result of how low the sector fell during the recession rather than an indicator of a rapidly expanding economy, said George Pipas, sales analyst at Ford Motor Co.

"This segment was so beaten down in 2009. Businesses could not get credit," Pipas said. "People were scared we were headed into another Depression and they stopped spending."

GM officials say the gains signal an economic rebound.

"With the continuing improvement in consumer spending, and improving profitability of these businesses, we're beginning to see a significant influx of small-business buyers to Chevrolet showrooms," said Don Johnson, vice president of U.S. sales operations at GM.

Auto industry sees increase in sales of vehicles for companies' use 02/02/11 [Last modified: Wednesday, February 2, 2011 6:11am]
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