Business and politics blend at the car show

Commerce, politics and a brief nod to veterans came together at the Connecticut Convention Center in Hartford on Friday, where a three-day auto show began at a moment normally associated with the signing of the armistice that ended World War I.

At the 11th hour of the 11th day of the 11th month, somber uniformed military personnel escorted Gov. Dannel P. Malloy at a ceremony marking Veterans Day — and the opening of a revived Connecticut International Auto Show.

“Thank you for your service,” Malloy told the veterans, standing near the ticket booth for the auto show. “This is a day set aside to honor you, and I want you to know how state government and your fellow citizen appreciate the sacrifices you’ve made.”

Malloy Car Show

Malloy opens the car show.

Then Malloy lined up with auto dealers and two state commissioners and snipped a ribbon with a pair of oversized scissors to open the show. Waiting customers quickly filed inside.

“I want to be promoting business in Connecticut, and the car industry is a major business,” said Malloy, whose first budget included some measures unpopular with auto dealers, including a sales tax increase and a new luxury tax.

But Malloy was welcomed Friday by dealers who say their sales last year rebounded to nearly $8 billion, up from $6.3 billion at the bottom of the recession in 2008. They are shy of the pre-recession high of $9 billion.

The auto show itself is an upbeat economic indicator: Over the past two years, car manufacturers barely participated, while this year they returned in strength, requesting more display space than was available.

“Clearly, the auto industry in Connecticut is on the way back,” said Malloy, who toured the convention hall before the 11 a.m. opening, lingering near a ruby red Chevrolet Volt, a plug-in hybrid vehicle.

Daniel C. Esty, his commissioner of energy and environmental protection, stood nearby, acknowledging a slight awkwardness in promoting electric-powered cars after the state’s worst power outage.

Malloy teased one auto dealer on his tour, saying the prospect of the first sales-tax increase in 20 years probably drove some consumers to showrooms prior to July 1 to beat the higher taxes.

The governor was told that is not a sales incentive they want to see repeated.

Malloy replied that another sales tax increase was unlikely.

“Did anyone tape that?” a dealer asked.

Malloy laughed.

Shanahan Malloy

Daniel Shanahan making a pitch to the governor.

Relations with the car dealers were not so easy after Malloy proposed bumping the sales tax from 6 percent to 6.35 percent on retail sales. He also wanted a new luxury tax on high-end cars and to make trade-ins subject to the sales tax.

The governor compromised, cutting his original luxury tax proposal to 7 percent on vehicles costing more than $50,000. He also abandoned taxing trade-ins.

Malloy argued then and now that the luxury tax would not cost dealers any sales, since competition for Fairfield County dealers comes from New York, where taxes are higher.

“I’ve heard no negative repercussions,” Malloy said.

The dealers had no sales data since the taxes rose July 1.

Buying a car out of state does not avoid the state sales tax if the vehicle is registered in Connecticut. Massachusetts and Rhode Island shares sales information with Connecticut under a reciprocity agreement.

Malloy said increased sales are good news for the state, since it generates sales tax revenue. Fourteen percent of all sales tax revenue are generated by car sales, according to James Fleming, president of the Connecticut Automobile Retailers Association.

The industry employees 12,000 people.

Malloy has  promised a business-friendly administration. On Friday, he was joined by Esty and Melody Currey, the commissioner of motor vehicles, who reinforced that message.

Currey said her administration has monthly meetings with dealers, looking to make it easier for them to do business. And Esty said his department’s mission reached beyond energy and the environment.

“I would like to say there is a third ‘E,’ the economy and the need for jobs and economic growth in Connecticut, that’s part of my agenda every day,” Esty said.

As Malloy left the auto show, he was approached by Daniel J. Shanahan, the director of sales and marketing for Control Module Industries in Enfield, a company that has recently entered a new product field: electric vehicle supply equipment.

The company designs and manufacturers charging stations can be mounted on the ceilings of parking garages. Their charger connections are retractable, so motorists do not have coil and hang cables.

“Did you want me to come over for that? Is that what you’re asking?” Malloy said, pointing to Shanahan’s display. “Sure, let’s do it.”