Automotive Dealer's Weekly Update 6/30/23
The Automotive Advisor Team
The overall economy is doing fairly well as seen below in employment conditions, wages, and buyers' ability. Even buyer confidence is moderately healthy. However, buyer ability and buyer confidence do not trump the buying conditions shown just below that are not favorable. Interest rates and borrowing costs are impacting buyer affordability. Inventory management and retail optimization will play a major role in dealer success over the next 18 to 24 months. Reach out to the Automotive Advisor Team to discuss a game plan.
New Car Outlook
Days of supply is 52, up one from last week. DS is relatively stable and has remained in the mid-50s range for most of this year. DS is now 41% above last year.
Available supply is 1.91 million, up 45K from last week. Supply is now 805K units higher than one year ago, or up 73% above last year.
Sold last 30 Days is 1.11 million, up 12K from last week. Sales pace now running 23% above last year.
The average Listing Price is $47,612, up $99 from last week. Prices are up 4% over last year – and holding at near this growth level since February – but the pace slowing slightly over recent weeks.
Used Car Outlook:
What’s the latest: Days of supply is 46, down one from last week. DS has been holding at this level for most of the spring. DS is now 8% below last year.
Available supply is 2.20 million, up 4K from last week. Supply is now 10% below last year.
Sold in last 30 Days is 1.43 million, up 36K from last week. Sales are down 2% from last year.
The average Listing Price is $27,171, down $99 from last week. Prices are holding steady down slightly from last year, but following “normal” patterns – down 2% from last year this week.
Wholesale Outlook:
The 3-year-old index continued to depreciate at a higher-than-average rate this week (down 0.9%). Lane efficiency dropped some and sale prices were 2.15% below MMR (MMR retention). 3-Year-old depreciation increased for both luxury and nonluxury below and every year model loans value last week.
Retail Margin Outlook:
What’s the latest: Retail price dropped $76 and the wholesale price dropped $269.
Why it Matters: once again the market is giving us $193 in gross margin
Bottom Line: It isn't always the case, but the wholesale market is an area of opportunity for dealers needing their inventory to meet sales demands. However, these margins do not include buy fees and transport fees along with the heavy or reconditioning fees that often come with auction cars.
Happy Selling,
The Automotive Advisor Team
https://theautomotiveadvisorteam.com/