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Local auto dealerships have high hopes for future

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By Charlotte Underwood

A failing economy and rumors of lost franchises have overshadowed the auto industry recently.   

Yet on a local level, dealerships report improvements and share high hopes for a brighter future regarding sales.

“As far as Rainbow Chevrolet is concerned, we’re here to stay,” said owner William Paredes.  

Paredes said as far as the rumors go about his franchise closing, it is not true.

“Basically no dealership has received a letter stating they have to close a franchise, but they have received letters stating that if things do not improve by 2010, then, their contracts may not be renewed,” Paredes said.

He said his understanding was the franchises would have an opportunity to appeal or explain why they should stay in business if letters were received.

Paredes explained that in areas where franchises couldn’t garner enough sales to sustain the business, then it was very likely that a store would eventually close.  He cited Knoxville as an example.  There are three GM dealerships in Knoxville and it is highly likely that one will have to close, Paredes said.

“GM is possibly trying to look at a foot print model similar to Toyota where there are less franchises spread across the nation,” Parades said.

Rather than looking at the down side of the possible franchise closings, Paredes said he is looking at the upside instead.

“It’s not necessarily a bad thing that some franchises can’t sustain having smaller stores, it will make the remaining stores stronger,” Paredes pointed out.

“We’ve been with GM since 1982 and since we have seven stores across three different states, GM looks at us differently,” Paredes said.

While Paredes feels the closing of some franchises may not be negative, he said he does not want other businesses, especially local ones to go out of business.

“If you’re the only guy in town, people may feel pressured to buy from you and instead go out of the county to purchase a vehicle which is opposite of what we want here at Rainbow Chevrolet,” said Paredes.

“If the public cares or is concerned about anything, then they need to spend their dollars here in town,” Paredes said, advocating for the county’s tax dollars to stay in the county.  He pointed out that if the consumers didn’t support local business in the county, then the local businesses wouldn’t be here to support and provide services for the consumers.

“Tax dollars need to be spent here in the county and that goes for any industry,” Parades said.  

He reported that while the ailing economy has affected everyone, especially the car industry, business was actually improving.

“We’ve sold 11 cars this past week, several to out of state people, so the economy is improving and business is still coming into the county,” said Paredes.

He said Rainbow Chevrolet is actually looking to acquire more franchises and to continue to grow and expand.

“We plan on still selling new cars and having an abundance of used cars as well; Rainbow Chevrolet is not going anywhere, we’re staying in LaFollette,” Paredes said.

Fred Cain of Cain Ford also reported an increase in business.  He said that while GM’s problems hadn’t necessarily affected Ford dealerships, the economy and negative news about the auto industry had taken a toll on business, yet things were “looking up.”

“I believe we’ve turned a corner in the economy and there are better days ahead,” Cain said.  Cain Ford is celebrating its 20th year in business and according to Cain, this isn’t the first financial difficulty the dealership has weathered.

“We’ve been through these tough times before, but I expect by the middle or end of the year that business will turn around even more,” Cain said.

He gives God all the credit for being in business for so long.

“God has always made provisions for us,” Cain said.

He said right now is an excellent time to buy a vehicle from a customer’s standpoint. Cain also dispelled the rumor there was a lack of financing available for buyers.

“It’s a misnomer driven by the news media and not indicative of how things really are; people that could buy can still buy,” Cain said.

He looks for healthy business in the next few months and said he truly feels like the worst times are behind.

David Bales of Bales Pontiac was contacted, but declined to comment.

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