ATUC Auto Market Recap 6-9-23
The Automotive Advisor Team
Economic Update: Source
May saw 339,000 jobs created when 195,000 had been expected. M
The Conference Board Consumer Confidence Index® declined 1.4% in May, as views of the present situation and future expectations both declined.
The daily index of consumer sentiment from Morning Consult declined 1.8% in May. Consumer attitudes have been sensitive to inflation and especially the price of gasoline for over a year now, but gas prices fell in May. A
New:
The day supply is at 52 days above last year.
Sales were up 30K last week and 27K this week and running 17% above last year.
That is continuing to hold the average listing price around $47,448, up $7 and now up 5% over last year.
Used Cars:
The used day supply is 44 days and now 11% below this time last year.
Sales were up to 32K last week and 35K this week. Still 3% below last year.
With that performance the listing price is staying steady at $27,191, up $10 over last week but 4% from last year.
Wholesale:
Wholesale vehicles depreciated by 1% to 102.5%. That’s 2.5% down in 5 weeks.
Lane Efficiency dropped again and is now hovering around 55%.
Here is a gold nugget in the negative data trends: Based on last week’s retail pricing, the market lost an average of $126 in retail price strength in MY 2020. The market also declined $590 in wholesale pricing in that same MY. Correlating these two data points the market gave us a net gain of $464 in margin but independently they have a negative outlook. Quite the opposite.
Summary:
Taking it at face value, it looks like the market is in a pretty tough spot. Listening to Jonathan Smoked this week, it was evident that a possible recession could appear at Ugly Head. In Q3, but certainly in Q4. The good news is that the recession could be short-lived and through Q2 of next year we could be coming out of it stronger than we went into it. There are gold Nuggets hidden in the dark clouds of the market.