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Third Oak Harbor car dealership folds

As of Monday, the number of new car dealerships in Oak Harbor is now down to just one.

Whidbey Island Auto Group, LLC, more commonly known as Whidbey Island Volkswagen Mazda, closed its doors Friday after 10 years of business. The business was located on Highway 20 just north of NE 16th Avenue.

According to owner David Sommerville, the dealership was forced to close because of poor operating results.

“Business has been hard for quite some time,” he said.

Sommerville, who bought the dealership in 2007, said they were doing well in everything but sales. In 2009, the dealership won the Gold Cap Certified Dealer award from Mazda. The honor is achieved by about 5 percent of dealers nationally.

But being recognized for its customer service was not enough to stay afloat. Over the past year alone, more than 3,000 car dealerships across the country have gone out of business, Sommerville said. While he disqualified himself as an economist, he said the statistic is telling and that people just aren’t buying new cars like they once did.

“I guess that would be a national trend,” he said.

It certainly appears to be the trend in Oak Harbor. Sommerville’s business is the third dealership in town to fold over the past two years. Since 2008, Whidbey Island Ford and Frontier Chevrolet both closed their doors.

Oak Harbor Motors, which sells Chrysler, Dodge and Jeep products on SE Pioneer Way, is the only new car dealership left.

Jill Johnson, executive director of the Oak Harbor Chamber of Commerce, said the loss of new car dealerships in the city is unfortunate. New cars are expensive retail items and that means the dealerships are significant sales tax contributors. Sales tax revenue helps fund a wide range of city services, from public parks to City Hall.

“Those are the things people look at when they choose to relocate,” Johnson said.

Doug Merriman, finance director for Oak Harbor, said in a recent presentation to the City Council that sales tax collection has dropped 12 percent over the past year, from $3.3 million to $2.9 million. It is expected to start climbing in 2011, but Merriman estimated they won’t reach 2009 levels again until 2016.

Johnson said new car dealers are also important because they are large employers. When they go under, it’s not just matter of those employees losing their jobs. It means each of them will no longer be spending a regular paycheck at local businesses.

Sommerville said the decision to close cost 20 people their jobs. While employees only learned the business was closing the same day as the announcement, Friday, he said his employees were seasoned veterans and were well aware of the struggling car industry.

“They may not have known, but I don’t know if they were surprised,” Sommerville said.

Sommerville said he wanted to extend his thanks to Oak Harbor and the greater Whidbey Island community for supporting the business over the past few years, as well as extend a special thanks to his employees. The warranties of Volkswagen and Mazda cars can be redeemed at any dealership; the closest are located in Burlington.

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