Record Recovery in Dealer Sentiment for Q3

First Up 09/08/20

Beltway Talk Podcast: An Interview with the Interviewer

Audrey LaForest, Automotive News’ government and lobbying reporter, takes a turn in the Beltway Talk hot seat to tell listeners what it’s like to cover the auto industry through a political lens. LaForest, who started her position in February, has reported on COVID-19 relief efforts, the new USMCA agreement, and a variety of regulatory issues impacting dealers. In this episode of BeltwayTalk , she talks about these topics and more – including her plans to move to D.C. and why she may already be driving her dream car. Listen and subscribe here. 

Record Recovery in Dealer Sentiment for Q3

Despite the ongoing effects of the coronavirus pandemic on the economy, franchised dealers were far rosier about the U.S. sales market in the third quarter than they were in the spring — a "record-breaking" turnaround on Cox Automotive's quarterly Dealer Sentiment Index survey. Automotive News reports that dealers reported record-low optimism on Cox's second-quarter poll, taken in late April and early May as the pandemic shuttered factories and showrooms. But vehicle purchases had rebounded when dealers were surveyed for the latest index, from July 27 to Aug. 11, and scarce inventory was resulting in higher transaction prices and contributing to strong dealership profits, said Jonathan Smoke, Cox Automotive's chief economist. Looking ahead, new-car dealers generally expect the market in the fourth quarter to be positive, though less so than the current quarter, partly because they're also grappling with supply shortages that could put a wrinkle in the sales recovery. Read more here (Source: Automotive News). 

Subaru Turns Up the Heat in the Sunbelt

Automotive News reports that a decade ago, toward the beginning of Subaru of America's remarkable streak of sales records, the automaker identified one region that would be critical to the brand's success. The Sunbelt. Unlike the Northeast and Northwest's sometimes harsh climates and challenging terrains, which were natural selling points for Subaru's all-wheel-drive models, the Sunbelt was not an area where large numbers of consumers were drawn to the brand. Subaru set out to change its Sunbelt fortunes by playing the long game. Today, it's bigger and stronger with a broader product range and targeted marketing, and it is winning a big chunk of business in the region. The Sunbelt, defined by the automaker as 13 states as well as Southern California, accounted for just roughly 15.4 percent of the brand's retail sales in 2010, according to Subaru. So Subaru began to put its plan in motion. Read more here (Source: Automotive News). 

Looking to Buy a Used Car in the Pandemic? So is Everyone Else

Used cars are usually overlooked in the fanfare accorded to cutting-edge electric cars and gussied-up pickup trucks. Now they are suddenly the industry’s hottest commodity, reports The New York Times. Consumers are snapping up used vehicles as second or third cars so they can avoid trains, buses or Ubers during the coronavirus pandemic. Others are buying used rather than new to save money in an uncertain economy, not knowing when they or their spouse might lose a job. Demand for older cars has also been fed by a roughly two-month halt in production of new cars this spring. Across the country, the prices of used cars have shot up. The increase defies the conventional wisdom that cars are depreciating assets that lose a big chunk of their value the moment they leave the dealership. In July alone, the average value of used cars jumped more than 16 percent, according to Read more here (Source: The New York Times). 

Chinese Car Sales Rebound at Fastest Rate in More Than Two Years

China’s car sales grew at their fastest rate in more than two years in August, driven by heavy discounts and new model debuts, adding momentum to a second-half recovery in the world’s largest auto market after a pandemic-disrupted first six months of the year, reports The Wall Street Journal. Retail passenger-car sales in the country increased by 8.9% last month from a year earlier to 1.7 million vehicles, the China Passenger Car Association said Tuesday, marking the strongest rate of growth since May 2018. It represented the second straight month in which sales outpaced those of the same month last year. Car sales to individual customers had declined by 3.4% in the April-to-June period compared with a year earlier before bouncing back in July with a year-on-year increase of 7.7%. With sales on a positive trajectory again, the CPCA now expects that retail car sales for the full year will fall short of last year’s totals by just 6% to 8%, said Cui Dongshu, the CPCA’s secretary-general. Read more here (Source: The Wall Street Journal). 

Webinar: An Update on COVID-19's Impact on U.S. Auto Sales

Cox Automotive Senior Economist Charlie Chesbrough returns to AutoTalk for an update on Thursday, September 10 at 2:00 p.m. EDT.

Topics to be reviewed include: 

  • Economic forecast and impact going into the fourth quarter 

  • Consumer sentiment and buying behaviors 

  • Stock market, interest rates, and employment 

  • An outlook for vehicle sales 

  • Current view of new and used retail sales and prices

Click here to register. 

Around the Web

Endurance Racing with Cars That Belong in a Demolition Derby [NY Times

The Steps Hyundai-Kia is Taking Toward Hydrogen Cars [TopGear]

Renault Will Develop and Build the Next-Gen Nissan Micra [Autoblog]

Los Angeles Auto Show Moved From November to May 2021 [The Detroit Bureau]