ATUC Auto Market Recap 6-23-23
www.theautomotiveadvisortream.com
Automoive Economic Update:
A new McKinsey study shows 36 percent of US consumers expect a quick economic rebound. Optimism isn’t yet back to 2021 levels, but it’s trending in a favorable direction.
Consumers in the younger demographic groups and the higher income brackets continue to be the most optimistic about their economic future, a pattern that has held throughout the pandemic to date.
New Car Market:
Sales pace now running 23% above last year and up 33K from last week driving day supply to 51, down 4 from last week but stable now at 42% above last year. the Average Listing Price is $47,521, up $354 from last week.
Used Car Market:
Sold in up 37K from last week also pushing day supply to 46, down 2 from last week and 8% below last year.
Sales are now down 3% from last year with the Average Listing Price is $27,266, up $5 from last week.
Vehicle Acquisition Market:
The 3-year-old index depreciated at a higher rate this week, down 1.1%. Lane efficiency was relatively flat and sale prices were 2% below MMR (MMR retention).
The 2020 MY retail price dropped $20 and its corresponding wholesale price dropped $301 so once again the market is giving us $281 in gross margin.
Automotive Finance Landscape:
The average auto loan rate declined by 4 basis points (BPs) in May compared to April, while the 5-year U.S. The share of loans with greater than 72-month terms increased 0.6 percentage points but was down 0.2 percentage points year over year.
For those with markets that have credit unions in your backyard, the good news is credit union lending has declined more than any other lending channel and credit union rates are starting to increase again to match traditional bank rates. All these are sourced in this week's report.
In Summary:
We know the rule is you make money at acquisition, not at retail. How you buy and what you buy is a critical part of inventory turn discipline. In this market variable used car practices and measuring your acquisition channels effectiveness can be the key to growth.