Monday, 14 December 2020 08:41

After Historic Turnaround in Q3, U.S. Auto Dealer Current Market Sentiment Fades in Q4


...current retail auto sales and sales expectations for the next three months as "strong," "average" or "weak."


The survey also asks dealers to rate new-car sales and used-car sales separately along with a variety of key drivers, including consumer traffic.


Responses are used to calculate an index by which any number over 50 indicates that more dealers view conditions as strong rather than weak.


Profitability Remains Strong


The overall profit index was at an all-time high in Q3 of this year and grew further in Q4 to 48. This indicates nearly half of all dealers in the U.S. describe their profits as strong in Q4.


For franchised dealers, the profit index grew to 70, up from 66 in Q3 and significantly higher than the index score of 51 in Q4 last year.


While the profit index increased, the cost index also saw an increase compared to Q3, reflecting that dealers feel expenses are growing in Q4. The index score of 61, however, remains historically low.


The price pressure index is also historically low in Q4, although the score did show a statistically significant increase from Q3, meaning more dealers are feeling pressure to lower prices.


Inventory Levels Improve


The new-vehicle inventory index of 48 significantly increased overall in Q4, up by 19 points compared to last quarter. The view from franchised dealers represents improving...