Cox: Dealers Feel Falling Profits Amid Inventory Growth, Weaker Market
Franchised auto dealers polled by Cox Automotive in the first quarter perceived no improvement in their markets — but no worsening conditions, either. However, those polled continued to show the sourest sentiment since the heart of the COVID-19 pandemic in the U.S., as growing inventory shrank profits and interest rates and other economic factors weighed on customers, reports Automotive News. "Dealers are making less money, and that really weighs on a lot of the outlook," Cox Chief Economist Jonathan Smoke said Tuesday while discussing the combined franchised and independent dealer survey results. He called reduced profitability "really a franchise story. Because independents have been feeling that for several years." He said franchised dealers also are now reporting "the same things on costs and pricing pressure" that had previously been felt more by the independent sector. Franchisees also again reported reduced traffic compared with the previous quarter. "I think pent-up demand is gone from the new-vehicle market," Smoke said. Click here for the full story.
Americans' Faith in Self-Driving Cars Has Tanked, AAA Study Suggests
Americans remain largely untrustworthy of self-driving cars, AAA's latest study of attitudes toward autonomous vehicles found, suggesting last year's spike in negativity was not only an accurate measurement of buyer sentiment, but a sign of even more headwinds for an already troubled sector. According to Autoblog, conducted mostly online, the 2024 survey's results came in nearly identical to those from 2023. 66 percent of respondents said they're flat-out afraid of it; 25 percent remain unsure. Only 9 percent said they trusted the technology. While the percentage of respondents who claimed to fear autonomous cars did tick down slightly in this year's study, they found a home in the "unsure" camp. It's apparent from the results below that attitudes shifted sharply in 2022. A Tesla driver blamed the car's "Full Self-Driving" tech after causing a multi-car pileup during the 2022 Thanksgiving holiday rush in San Francisco. Such high-profile incidents likely help shape public attitudes toward the technology. But AAA cautions automakers not to pull the plug on their safety suites just yet. Drivers still want advanced tech, just without the self-driving stuff. Click here for the full story.
Porsche's Product Makeover Plan to Halve Lineup's Age
Porsche CEO Oliver Blume said an ambitious product rollout in the next few years will halve the portfolio's age — from three years to 18 months. "That's quite unique in the automotive industry," said Blume, who also steers parent Volkswagen Group. "2024 is going to be a year of product launches for Porsche — more so than any year in our history." Heavy on electrification, the product expansion begins with a battery-powered variant of Porsche's best-selling Macan crossover. The delayed EV debuted in January and will arrive in U.S. stores in the summer, reports Automotive News. "In the first few weeks, we are overwhelmed by the orders coming in for the new electric Macan, which makes us confident that this car is going to be a hit," Blume said Tuesday at the company's annual press conference in Leipzig, Germany. The Macan EV delivers up to 630 hp and can accelerate from 0 to 60 mph in as little as 3.1 seconds. "These are sports car figures," Blume said. "We believe we have positioned the car appropriately." Electrification will also propel Porsche into a new, more profitable segment. Click here for the full story.
Cars Commerce Honors Dealers Earning Top Consumer Reviews
Cars Commerce announces the winners of its Dealer of the Year awards that recognize outstanding dealers. The awards are based on consumer reviews, and the winners share a common trait: a process to collect and act on those consumer reviews to ensure high-quality customer service. That helps build consumer loyalty, say Cars Commerce executives and dealer winners. “Far too many dealers still consider the customer feedback or the review to be the end of the process when in reality it is the beginning,” Jamie Oldershaw, vice president of reputation strategy at Cars Commerce, tells WardsAuto. The Dealer of the Year awards are based on more than 1 million customer reviews, positive and negative, submitted to the online marketplace Cars.com in calendar 2023. Winners were selected based on average star ratings, total number of reviews and dealer response rate to those reviews. Of the more than 50,000 U.S. and Canadian dealers with Cars.com profiles, 987 were selected as regional, national, and state winners. Click here to find out the winners.
Negative Equity Sets New Record in Previous-Quarter’s Used Vehicle Market
Negative equity in the used vehicle market grew in the final months of 2023, underscoring normalizing trends in the preowned segment. Edmunds noted high levels of trade-ins worth less than the outstanding balance of the owner’s car loan in its fourth quarter used vehicle report. Roughly 20 percent of new vehicle sales involving a trade-in had negative equity during the October-through-December period, the highest level seen since 2021. The most commonly affected trade-in buyers were those who purchased their model during the COVID-19 pandemic when car prices were drastically inflated due to inventory shortages, reports CBT News. Negative equity values also rose to all-time highs. Edmunds notes that the average outstanding balance on an upside-down auto loan was $6,064 during the period, a record-breaking number, and an increase of roughly 46 percent since late 2021. Preowned values have also declined sharply. The average transaction price for a used vehicle dropped 4.4 percent year-over-year, with the greatest declines seen among models made in 2022 (-$6,763) and 2021 (-$3,294). The tendency for newer models to lose value faster reflects the impact automaker production had on the used vehicle market when it picked back up in early 2023. Click here for the full story.
CARFAX: New-Car Deals Help Fuel Used-Car Price Drops
New car inventory is at its highest level in three years, and that means more low-interest financing and more cash-back deals from automakers. In turn, that is helping to drive down the cost of used cars. That drop has actually accelerated through the month of January, to the point where only pickup trucks cost more than a year ago, and, in that case, just barely. Average monthly prices have dropped anywhere from $400 to more than $1,000 month-over-month in every category. The high end of each category’s price range has also fallen by at least $1,000 as dealers act to move the most expensive used vehicles. More used cars should be hitting the market soon, since three years ago, stimulus checks helped spur a boom in car sales after the big pandemic drop in 2020. But those vehicles won’t be enough to return the market to normalcy just yet. Inventory is still millions below normal, and certified pre-owned (CPO) cars, in particular, are hurting because leasing dried up in 2021. Fewer leases mean fewer cars being turned around by their owners.
Around the Web
The Quickest EVs We've Tested: 60 MPH in under 3.5 Seconds [Car and Driver]
For Buyers and Sellers, EV Range Is Still Too Confusing [CBT News]
Report: Many New and Used Hybrids Don't Sit on Dealers' Lots for Very Long [Autoblog]
The Cheapest Sedans You Can Buy for 2024: 4 Doors for Low Five Figures [Motortrend]
