We’re now in the final stretch of 2024, and the automotive industry continues to face a number of significant shifts and challenges. From the port strikes to the latest news around Stellantis and Volkswagen, there’s a lot to unpack. Here to help us break it all down and give us a look at what’s ahead for the buy/sell market is Ryan Kerrigan, Managing Director of Kerrigan Advisors, on the latest episode of Inside Automotive.
Key Takeaways
1. While the industry does not show significant underlying growth, the current sales environment remains strong and consistent with profitability. Although 2024 is tougher than previous years, the market is still performing better than pre-COVID levels.
2. The ongoing port strikes, involving 45,000 longshoremen at 36 ports, are impacting the automotive supply chain. These ports handle 34% of automotive and parts imports into the U.S., and the disruption could lead to inflationary pressures, affecting the overall economy and the industry.
3. Recent interest rate reductions by the Federal Reserve have yet to significantly impact the automotive market. However, these reductions are expected to influence the industry over time, positively affecting consumers’ financing and dealership operations.
4. The Biden administration recently imposed a 100% tariff on Chinese EVs and substantial tariffs on auto parts and semiconductors. While Chinese cars are not yet prominent in the U.S. market, China is rapidly increasing its global automotive exports, with projections to surpass six million vehicles in 2024.
5. Stellantis dealers continue to struggle due to excessive and outdated inventory, high average selling prices, and slow executive response from the European-based parent company. The situation is exacerbated by leadership turnover and an apparent disconnect between Stellantis’ North American market and its European leadership.
"Dealers are generally in a much better position today compared to 2019. As we move towards the new normal, many groups have larger organizations with higher revenue and more cash on their balance sheets due to the COVID era." — Ryan Kerrigan
