In an effort to prop up sagging auto sales due to supply chain disruptions and inventory shortages, the city of Montclair agreed to give a local auto dealership $375,000 for a new electronic sign that replaces the existing one along the 10 Freeway.
The city is worried that flagging auto purchases will cut into sales tax revenues, which make up a bulk of the city’s general fund. So, earlier this week, the City Council voted to award the money to Metro Honda to build a new electronic messaging sign that will tower over the south side of the freeway just west of Central Avenue.
The existing sign has stopped working for extended periods of time and when it does function, the images displayed are of poor quality. A new sign will have greater capabilities to display brighter, clearer messages with sharper resolution, the city reported.
In addition to the Honda dealer, the Metro Auto Group includes an Acura and a Nissan dealership as well. Metro Honda General Manager John Lee declined to comment.
Besides advertising issues, dealerships across the United States have been hit by supply chain disruptions, the city reported.
The coronavirus pandemic has resulted in a shortage of computer chips used in new vehicles, resulting in some carmakers to terminate certain models until 2023 and even pause production at certain plants. Some dealerships are experiencing extremely low inventory, which cuts into new car sales, according to the city.
Brian Goodermont, general manager of Maserati in Ontario, said the inventories are very low across all the car stores in the Ontario Auto Center, located off the 15 Freeway between the 10 and 60 freeways. For example, a Subaru dealership that normally sells 200 cars a month is only receiving five to 10 new models a month, he said. And the Toyota dealership in the group has very few new models to sell, he said.
“New car inventory on everybody’s lot is a fraction of what it could be,” Goodermont said, adding that dealerships are waiting for more semi-conductor chips to be made in China and Taiwan for use in new cars, something that may not happen for at least another year.
Montclair is hoping by the time the new sign is built, more new car models will become available.
Also, as part of the deal, the city will be granted use of the sign for public service announcements and for advertising city events 15% of the time each day. The car dealerships will use the sign for advertising 85% of the time. The application is already working its way through the city planning and design departments.
Councilman Ben Lopez said he became interested in a city-only electronic messaging sign last year and was pleased to see this compromise.
“The fact that the city can utilize it for announcements of city functions and events is a great idea,” he said during a recent City Council meeting.
City Manager Edward Starr said the city is still pursuing an independent city electronic message sign elsewhere.
Nearby, Ontario has access to messaging on three freeway-close electronic signs, one at a Chevy dealership, another at a Mercedes-Benz dealership and one at the Ontario Soccer Complex on East Philadelphia Street facing the 60 Freeway.
The Montclair agreement states that Metro Honda, Metro Acura and Metro Nissan must continue operating in the city, in the same location at 9399 Autoplex St. Also, any additional sales and property tax revenues produced will be applied to the city’s allocation, thereby reducing the amount that would have to be paid back to the city, the city reported.
Montclair spends $375,000 to help auto dealerships pay for new freeway sign - Inland Valley Daily Bulletin
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