New vehicle supply is normalizing in a slowing economy with high rates, while pricing power has gone down and vehicle affordability is on the rise. That is according to a snapshot of the state of the automotive industry in the United States.
The snapshot is based on Cox Automotive’s Q1 2024 Industry Insights and Sales Forecast. The report shows that real GDP growth has increased in the first quarter of the year by 2.4%. Interest rates were up 5.33% in March from 4.65% a year earlier. Unemployment was up 3.9% last month, compared to 3.5% in March 2023 (and 3.7% in January 2024). And buyer confidence declined slightly from 76.9 in February to 76.5 in March.
The industry snapshot also considers how dealers see the market situation. For Cox Automotive’s dealer sentiment index for Q1 2024 — in describing the current market for vehicles in the areas they operate, franchised dealers scored 49 (on a scale of 1 to 100), which is the same as Q4 2023 and down for 54 in Q1 2023. Independent dealers scored 39 on the index, which is up one from Q4 2023 and down 1 from Q1 2023. And the overall index sat at 42, meaning franchised dealer sentiment was stronger than independent dealers.
On what the vehicle market in a dealer’s specific area may look like three months from now, the index sat at 56 for franchised dealers — more than Q4 2023’s 46 and exactly the same as Q1 2023. For independent dealers, the index reached 50, which is higher than Q4 2023’s 40 points and one less than Q1 2023. The overall index sat at 51, meaning franchised dealer sentiment was stronger than independent dealers.
Dealers can view the full report here.
