As dealers navigate the ever-changing headwinds of today’s automotive landscape, many are worried about the effects of rising interest rates on consumers. Although inflation is showing signs of stagnating, car buyers are still facing major financial roadblocks to purchasing their next vehicle.
On this episode of Inside Automotive, host Jim Fitzpatrick is joined by Tom Maoli, president and CEO of the Celebrity Motor Cars company. Maoli is a veteran dealer in the luxury segment with a track record of achieving success where others have stumbled. His insight into the industry and the needs of car buyers has helped him easily navigate many challenges throughout the years. Now, he discusses the current economic headwinds affecting consumers in 2023 and the long-term impacts of interest rates on dealership earnings.
1. Interest rates affect more than the car market: consumer finances are impacted by rising costs of housing, food, gas and other necessities.
2. Although the Federal Reserve is using rising interest rates as a means of combating inflation, dropping rates could be key to revitalizing the American economy.
3. The industry is unlikely to see any substantial headway in either interest rates or the United Auto Workers strike in the near future.
4. Electric vehicles are seeing limited success in the car market, which could lead to lower production in the coming months.
5. In the final months of 2023, dealers should expect the industry’s impressive sales performance to continue but prepare for rising interest rates to impact demand in early 2024.
"I really think it depends on the brand, the location and where you're at, but the interest rates are really what's crushing the economy." — Tom Maoli