Sour economy forces local Hyundai lot to close down

Chris Cadot goes from being sales agent of the month at United Hyundai in Las Vegas to looking for a new job to start the new year. Luckily for him, he transferred to United Nissan.

Cadot's accolades at United Hyundai were painted on the showroom window of the shuttered automobile dealership at 2025 E. Sahara Ave., where the lot had been cleared of inventory and a letter on the door referred any business-related issues to United Nissan.

A dealership-owned Hyundai Veracruz Limited parked in the general manager's designated spot was being loaded with boxes Monday.

"It happened real quick," a man at the dealership said.

The business employed about 100 people.

Calls to United Hyundai and its parent company, Forman Automotive, were not returned. Bank of America has sued the company, claiming it's owed $12.3 million by Forman.

The general economy may be showing signs of recovery, but not enough to save the automobile industry, which has seen a number of dealerships close in Las Vegas. Just down the street from United Hyundai are empty remnants of Pat Clark Pontiac and Las Vegas Cadillac.

Bankrupt automaker Chrysler Corp. terminated franchise agreements with nearly 800 dealerships last year, including United Jeep Chrysler and United Dodge in Las Vegas. Another Chrysler dealership, Integrity Chrysler, had already closed due to poor sales.

General Motors also announced dealership closures, but none in Las Vegas. Bill Heard Chevrolet and Vista Chevrolet had previously closed when the economy hit the skids.

Consumers are reluctant to spend on big-ticket items such as new cars when they're worried about keeping their jobs and losing equity on their homes, said Jeremy Aguero, principal of Las Vegas-based Applied Analysis and speaker at the upcoming Preview Las Vegas economic forecast.

Taxable sales on new automobiles declined 30 percent in Southern Nevada last year, he said.

"The auto industry is in the middle of the economic storm," Aguero said. "In addition, consumers have been conditioned to wait for a deal like 'Cash for Clunkers,' some program where they can buy something for less than it's worth, or at least that's what they perceive."

Unemployment in Las Vegas topped 13 percent during 2009 and even people who are working have less money to spend, Aguero said.

"It also has to do with expectations of how you're going to be doing a year from today," he said.

A banner at the closed dealership advertised Hyundai as the highest-ranked compact car for initial quality by J.D. Power and Associates at up to $5,300 less than the competition.

Hyundai Motor and affiliate Kia Motors aim to boost sales by 17 percent this year driven by a recovery in the global economy and a series of new models. The auto group, which sold a record 4.63 million vehicles last year, is targeting sales to rise to 5.4 million in 2010, Chairman Chung Mong-koo said Monday in The Korea Times.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.