A conversation with Toyota of Newport's Paul Mika
Paul Mika, the owner of Toyota Scion of Newport, has seen a number of recessions during his long career in the car business, and is optimistic that spring will bring renewed interest in purchasing automobiles.
"We've seen it already," he said. "On warm days people come out. There is a lot of pent up demand."
Mika has owned Toyota-Scion of Newport on East Main Road in Middletown since 1992. He also owns Hyundai of Newport, located on West Main Road.
A native of Austria, Mika has been in the car business in the United States since 1957. Before that he worked as an auto technician in Austria. He was 7 years old when World War II ended.
When Mika came to the U.S. he settled in Detroit where he worked in just about every position in a Cadillac dealership and eventually became the dealer's owner. It was a big dealership that sold 200 plus cars per month.
Mika said he sold the dealership and moved to Rhode Island because he liked to sail. Eventually he was able to purchase the Toyota dealership he owns today.
"I always knew that Toyota was a company I wanted to be associated with," he said. "It was Toyota's attitude toward quality that impressed me. Toyota has always been concerned that making quality cars is more important than making the cheapest car."
Mika said the Toyota philosophy is one of gradual improvement, always making their product better. The Detroit philosophy was "this is good enough."
The U.S. was going through a recession when he moved here in 1957, Mika said. "I could barely speak English," he recalled. "I was scared." The automotive business suffered through the gas crunch in 1973, he added, and another recession in 1980-1981.
"This recession we have now is pretty interesting because it seems to be worldwide, probably because everything is more interdependent today," Mika said. "We have to prop each other up or fail together."
Mika said the car business remains a good business to be in because "people still need cars."
"There is really no alternative in this country," he said.
Mika believes that President Obama's initiative to improve public transportation is important. But the car will still have its place in the American landscape. "We need to put more money into public transportation. I know that may be funny for a car dealer to say, but I grew up in a country where everyone traveled by trains that always ran on time," he said. "My family never owned a car."
"When I visit Austria today I do not rent a car. I travel by train and street car," he added.
The economy has faltered because people have lost faith and as a result are not purchasing the big items like cars, appliances and houses. "The biggest problem we have is the confidence level. We still have 90-percent employment," Mika said. "Those people are still collecting paychecks. There is still credit to be had for those people."
"This recession has been a stark awakening because most of us have been living beyond our means. We've been financing our lives with credit cards," Mika said. "That is being reigned in. I've seen people who had $50,000 charged on credit cards who only earn $40,000 per year. That's $50,000 a year for buying televisions and ski vacations. Most people cannot continue afford to live like that. Many young people got into credit trouble."
Mika said the recession has forced his business to change to meet the challenge. "We have trimmed expenses," he said. While there has been a decline in new car sales, used car sales have increased. Mika said the used car market has seen a shift to a lower price level. "It's not unusual for a Toyota to go 200,000 miles," he said. "So we will invest money in used cars that have a future."
The service department and auto body department are busy "although we have seen some people putting off maintenance until things are falling off," he said.
Mika believes the car business has a great future in the years ahead. "I'd like to see GM make it. I know many good people who work there. But they need to trim down. The culture of the company was that they were everything for everybody," he said. "What's good for GM is good for the country. That no longer is true."
The future for cars is "green," Mika said, adding that Toyota has pledged that all of its vehicles will be hybrids or beyond in 10 years. "That was about three years ago, so we've got seven to go," he said.
Mika said there was a lot of demand for hybrids when gas prices were high. But now that gas is below $2 gallon "people have short memories."
Hybrids not only save fuel, Mika said, but added they are also good for the environment by producing little or no pollution.
Mika is proud of his Toyota-Scion dealership on East Main Road. His business relocated there from West Main Road in 2006 where it was cramped for space. Mika said he had been searching for a new home for several years when the present location became available. "We had customers who couldn't find a parking space at our old facility," he said. "Our customers love our new facility. It was much more that we could have afforded to build."