The Q2 Cox Automotive Dealer Sentiment Index was recently published [on June 10, 2024]. Let’s take a look at the findings since this index provides a current view of dealer sentiment and looks forward to the next 90 days. Mark Strand, the Senior Director of Economic and Industry Insights at Cox Automotive, joins us on the latest episode of Inside Automotive to walk us through the findings.
Key Takeaways
1. Despite typically strong spring sales, Q2 saw a dip in dealer sentiment. Strand attributes this to lingering uncertainty around interest rates and affordability, impacting customer financing and dealer profitability.
2. The survey reflects dealers’ concerns over the impact of political shifts on industry regulations and policies, particularly regarding EV incentives and interest rates. This uncertainty adds to the market’s cautious outlook.
3. Dealers express mixed sentiments toward EVs. They significantly acknowledge the role of tax credits in boosting sales. While some see opportunities in EV adoption, others remain skeptical about profitability and market potential.
4. There’s a notable disparity in sentiment between franchise and independent dealers. Franchise dealers report a stronger outlook on the used car market compared to independents, who face more challenges with inventory sourcing and market conditions.
5. Strand advises franchise dealers to capitalize on service opportunities for older vehicles amidst affordability challenges. For independents, he suggests closely monitoring the wholesale market for potential inventory opportunities arising from increased fleet de-fleeting and normalized repossessions.
"There's a big opportunity out there to compete in fixed ops and the service lane, maintaining older vehicles until we see some affordability relief." – Mark Strand
