Monday, 14 December 2020 08:41

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


...new-vehicle inventory conditions despite an index below the positive threshold of 50. For comparison, the new-vehicle inventory index was 59 in Q4 of last year.


The used-vehicle inventory index was also significantly higher from Q3 to Q4, moving from 21 to 41. The gap between the franchised and independent dealer perception of used-vehicle inventory stayed the same in Q2, at 9 points.


The used-vehicle inventory mix index increased significantly compared to last quarter, reflecting an improving inventory mix. The reading of 52 means most dealers consider used inventory mix to be good.


The 20-point improvement in the used-vehicle inventory index---moving from 21 to 41---was the largest positive increase in the Q4 study. The new-vehicle inventory index saw the second-largest increase, up 19 points from Q3, as franchised dealers' perception of inventory improved significantly.

COVID-19, Limited Inventory Continue to Dampen Business


The top five factors holding back the business across all dealers shifted modestly in Q4 from Q3, with Business Impacts From COVID-19 reclaiming the top spot with 47% of dealers citing it, moving up from second.


Limited Inventory moved down to second from first last quarter, with 45% of dealers citing it. Political Climate rose to the third spot from fifth in Q3. Economy stayed in the fourth spot, and Market Conditions dropped from third to fifth, with 37% of dealers citing it as a top factor holding their business back.


For franchises, Political Climate saw a statistically significant increase, rising to the top concern with...