Cox Automotive Dealer Sentiment Index Reveals Concerns About Profitability and Inventory Disparity – Erin Keating
The Q1 Cox Automotive Dealer Sentiment Index was published in March. It provides a current view of dealer sentiment and looks forward to the next 90 days. Joining us on the latest episode of CBT News’ Inside Automotive is Erin Keating, Cox Automotive Executive Analyst, to break it all down. The Cox Automotive Dealer Sentiment Index shows that dealers are cautiously optimistic. However, overall sentiment is slightly weak and uneven, reflecting underlying market uncertainties. Dealers are primarily concerned about profitability, which is dragging down sentiment scores. Factors like showroom and online traffic, as well as rising operational costs, are influencing dealers’ outlooks on their financial health. There is a significant difference in inventory concerns between franchise and independent dealers. While franchise dealers see a rebound in new car inventory, independents struggle with used car supply. This highlights a significant disparity in market experiences. Dealers are navigating a transitioning market, moving away from the pandemic-induced sales environment to a more normalized yet still profitable landscape. Dealers’ adaptability and resilience are key in facing these shifts. Click here for the full story.
Record Negative Equity and High Interest Rates Plague Auto Trade-Ins
A stunning 23.1 percent of people trading in a used vehicle for a new one were upside down on their loan in the first quarter of 2024. The average amount of negative equity in those trade-ins has reached an all-time high, which means that even as MSRPs for new cars come down, affordability remains a challenge. In fact, as a result of falling prices for new and used vehicles, people who were upside down on their loan owed an average of $6,167 more than their vehicle was actually worth early this year, reports Carscoops. Alarmingly, the number of people who have negative equity was increasing. According to research from Edmunds, in 2023 18.3 percent of shoppers trading in a used vehicle were upside, and in 2022, 14.7 percent of Americans owed more than their vehicle was worth. Unfortunately for those shoppers, loans for new vehicles are still expensive. For the fifth quarter in a row, the average annual percentage rate (APR) — that is, the amount of interest buyers can expect on their loan over the course of a year — was above 7 percent. Unfortunately for those shoppers, loans for new vehicles are still expensive. Click here for the full story.
How Genesis Is Doing What Every Other Luxury Brand Since Lexus Has Struggled to Do
Once a model wearing a Hyundai badge, since Genesis was spun off as a standalone luxury marque in 2015, it has managed to successfully establish itself in a way the likes of Lincoln, Infiniti, and Acura have struggled to do as luxury arms of mainstream brands. We'd go so far as to label the rise of Genesis as the closest we've seen to the launch of Lexus three and a half decades ago, and in a modern automotive climate that is far less conducive to seeing startups go the distance. Since 2016, when sales commenced stateside, Genesis has quickly eaten into the sales figures of these other marques, bucking the trend of declining sales with year-on-year growth on all but two occasions, one of which was the year we were struck by the pandemic. But what is the key to that success? What challenges does Genesis face? And how does it foresee itself evolving to go toe-to-toe with BMW, Audi, and Mercedes-Benz? To answer these questions and more, CarBuzz sat down with Ash Corson, director of product planning for Genesis in the USA, at the 2024 New York International Auto Show. Click here for the full interview.
Dealership Groups Grow, Sales Climb and Top 150 Rankings Change
The largest dealership acquisition of 2022 helped Safford Automotive Group smash into the top 50 of Automotive News' 2024 list of the top 150 dealership groups based in the U.S. Safford Automotive of Springfield, Va., ranks No. 38, climbing 49 spots from the year before, the most of any auto retailer. Groups are ranked by their new-vehicle sales in 2023. Safford Automotive bought 14 franchised stores and a used-only dealership in Maryland and Virginia from Brown Automotive Group in the November 2022 transaction — the largest tracked by Automotive News that year based on new-vehicle stores — more than doubling its store count. It also added a store in December 2022. James Gramm, Safford's president, told Automotive News that adding brands helped his group more than double its new-vehicle retail sales to 22,346 in 2023. "The acquisition got us into a lot of different brands, which gave us some staying power, economically," Gramm said. "This is always a cyclical business, so when one does better, one does worse." Click here for the full story.
Consumer EV Interest Continues to Shrink
Despite the dozens of new electric vehicles automakers plan to roll out over the next few years, the percentage of consumers considering an EV is shrinking, according to two new surveys. Nearly a quarter of car shoppers — 23 percent — said they dislike EVs, according to an Edmunds survey fielded in January. In April 2023, the last time Edmunds asked the question, 19 percent said they disliked EVs. Automotive research firm J.D. Power also is seeing declining interest, reports Automotive News. The percentage of consumers who said they are very likely to consider an EV for their next car declined in February for the fourth straight month to 24 percent, according to J.D. Power's report. The share of consumers who said they are very unlikely to consider an EV rose to more than 22 percent from about 19 percent a year earlier. The drop in EV sentiment underlines dealers' struggles to sell the vehicles. They had 159 days' supply of EVs on their lots in February and 114 days' supply through mid-March, according to Cox Automotive. Click here for the full story.
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