Norco Auto Group, a mainstay of the Sanatoga PA business district and at one time the second-largest Jeep-Eagle dealership in the state of Pennsylvania, closed its East High Street showroom Friday (Oct. 10, 2008). A sign posted on its doors said the company was a victim of “poor economic conditions.”

Norco Auto Group, East High Street, Sanatoga PA, displayed cars on its lots in mid-September.

Its closure came just three days after the chairman of the National Automobile Dealers’ Association (NADA) predicted that up to 700 car dealerships across the country would be forced out of business this year.

For many auto dealers, shutting down is the result of a one-two punch delivered by the current credit crisis. Dealers can’t get financing to keep cars on their lots, the NADA said, and consumers can’t get loans to buy new cars. More than 94 percent of buyers rely on financing when purchasing a vehicle, the trade organization noted. It was not immediately known what role, if any, credit crisis-related problems played in Norco’s closing.

Earlier last week, Norco President James Phillips acknowledged his company had been actively reducing the number of cars on its lots at 2148 E. High St. “Inventory’s my greatest cost, and it’s one of the things I can control,” Phillips said. As of yesterday (Oct. 13, 2008), about 80 vehicles – most of them new cars and trucks – remained on Norco’s lots. The asphalt parking area that faces East High Street, once lined with dozens of cars, was vacant.

"Due to poor economic conditions."

On three entrance doors to Norco’s glass-enclosed 40,000-square-foot showroom and garage, white signs with black print simply said “Closed.” On the door leading to Norco’s repair department, however, a sign that referred to the troubled economy added, “we apologize for any inconvenience.” There was no indication when, or if, the company would re-open.

Norco Auto Group, which also did business as Norco Motors Inc., started in North Coventry (PA) Township in the mid-1980s, according to Dun and Bradstreet (D&B) business information supplied by Manta.com. At its peak the company reportedly employed 65 people, and enjoyed annual gross sales volumes estimated by D&B at between $23 and $30 million. It moved to the East High Street location in the 1990s.

Norco, which sold Chrysler, Dodge and Jeep vehicles, was considered a “Five-Star” Chrysler franchise. According to the manufacturer, that meant Norco met or exceeded specific requirements for customer satisfaction and follow-up, and employee training.

Phillips, a Kepler Road resident who last year was elected as a member of the Lower Pottsgrove (PA) Township Board of Commissioners, is well known in the greater Pottstown area for his participation in community activities.

Annette Sykora, chairman of the NADA, said last week (Oct. 7, 2008) that the U.S. was “likely to lose up to 700 dealerships this year” because of the credit crisis and other economic factors. Paul Taylor, a NADA economist, said that number represents more than 3 percent of new-vehicle dealers nationwide, and compares with 430 closures a year earlier. “The credit crunch on Main Street is real,” Sykora said.

Dealers like Norco that sell cars from General Motors Corp., Ford Motor Co. and Chrysler LLC are having the most difficult time receiving financing, Bloomberg News Service reported last week.

Related:

• What Happened To Tax And Title Fees At Norco?