The latest Q3 2024 Cox Automotive Dealer Sentiment Index (CADSI) reveals that U.S. automobile dealers view the market as increasingly weak, with the overall sentiment score dropping to 40, down from 42 in Q2 and 45 last year. The report highlights persistent uncertainty stemming from economic and political factors, including the upcoming presidential election, which continues to weigh on dealer confidence.
Franchised dealers showed a slightly improved sentiment with a score of 50, but independent dealers remain highly pessimistic, scoring only 37, the second-lowest in the survey’s history. This stark difference has dragged down the overall sentiment.
Dealers’ outlook for the next three months also weakened, with the market outlook index falling to 42, reflecting expectations of further market softening. Franchised dealers recorded a market outlook score of 49, while independent dealers fell to 39. Dealers cite rising operational costs as a key factor, as the cost index hit a record high of 77, impacting profitability, which continues to decline, especially for independent dealers.
Despite inventory no longer being a major issue, both new and used vehicle sales environments are perceived as weak. Franchised dealers reported a drop in new-vehicle sales sentiment, while the used-vehicle sales index stood at 43, indicating a poor market.
Electric vehicle (EV) sentiment saw a slight uptick in Q3 but remained below last year’s levels. A growing number of dealers report that government-backed EV incentives are positively impacting sales, despite decreased expectations for future EV sales.
Economic conditions, high interest rates, and political uncertainty were the top factors restraining dealer performance. Political climate concerns saw a significant rise, with 44% of dealers noting it as a key factor, the highest since it was first tracked in 2019.
