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From: Jared Hamilton
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Sherri Riggs

Sherri Riggs Community Manager

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Outlook is Grim for Summer Auto Sales

Each quarter, the Cox Automotive Industry Insights team surveys U.S. automobile dealers, both franchised and independent, in an effort to measure how they are feeling about the auto business and vehicle sales, both new and used. It's called the Cox Automotive Dealer Sentiment Index (CADSI) and it focuses on both current market conditions and prospects for the coming three months. 

In Their research, Cox found that a large majority of dealers are nervous for summer sales. The optimism found in the first quarter, is no longer there.

Cox Automotive Chief Economist Jonathan Smoke says it's one of the main take aways from the quarter 2 survey, "The biggest concern coming from this quarter’s survey is that expectations for the market moving into the summer have diminished substantially."

In Q1, 70 percent of dealers were extremely optimistic about future months, now only 56 percent of dealers feel that way.

So what is holding dealers back from thinking positively about the future months? Well there are a few reasons. 

  1. Market Conditions
  2. Limited Inventory
  3. Credit Availability for Consumers
  4. Competition 
  5. Expenses

The good news, however, is that current (Q2) market attitude is fairly positive. 

What are your thoughts on Q2, and feelings coming into Q3?

 

 

Derrick Woolfson

@sherri, I wonder too if rising cost in homes has been a deterrent too where in many markets house prices have increased as much as 1.6% w/ APRS (while still historically low) peaking at the mid to high 4's with the projection of hitting as much as 5% for Q1 19? The other factor to consider as well are gas prices as they have slightly increased, which might be a major deterrent it could put those "potential" buyers on the backseat as they feel out the economy. Oddly, though, from what it seems - customers are "confident" in the current state of the economy, no? It will be interesting to follow. 

Sherri Riggs

Derrick those are great questions! those answers might be in the report... i'll have to look closer. As to your last question, I think dealers are confident... not necessarily customers. But time will tell how accurate this outlook is

Amanda Gordon

Interesting. Is this separated by new/used and can they really predict the future?

Sherri Riggs

Amanda, It's not so much a prediction of the future. It's more of an outlook and how dealers feel about the future. And then comparing what dealers expect to happen, versus what actually happens. 

Overall I find it interesting that most dealers were very optimistic about the future in Q1, but that optimism has dramatically decreased over time.

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