Auto dealers in the US are still worried about the future. They are no longer worried about the lack of cars to sell. But high interest rates and economic uncertainty have them worried that potential buyers won’t be able to afford their products.
That’s the conclusion of the latest Cox Auto Dealer Sentiment Index. In a survey of 1,060 U.S. auto dealers conducted quarterly by Kelley Blue Book’s parent company, Cox Automotive, the index tells car buyers how the dealer feels on the other side of the table. negotiations about the future.
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The second quarter of 2023 is the fourth quarter in a row in which the average dealer is more pessimistic than optimistic about future business. Scores improved slightly to 45 on a 100-point scale, but remained below the 50% mark.
Dealers feel the economy is weak
Auto dealers in the US continue to see the US economy as weak. A year ago, the US Economy Current Index score was 50, indicating that dealers were mostly neutral in their views. Now, most dealers see the economy as weak. The index score in the second quarter is only 44.
The profit index fell to 41, a seventh consecutive quarterly decline. Dealers reported that customer traffic, both in-person and online, was higher in the second quarter.
More confidence in new car sales than used cars
Dealerships feel better about the new vehicle market than they do about used vehicle sales. They rated the new vehicle sales environment at 58, but the used vehicle market at 42.
Related: Why the used car market is so bad and it won’t get better anytime soon
When asked about the factors holding back business, the economy (55%) and interest rates (53%) were the top two concerns cited.
30% of dealers indicated that credit availability is a challenge in the second quarter survey, up from 26% in the first quarter and only 17% in the second quarter of 2022. The political climate also increased significantly, all and that it ranks seventh in the list of main factors, behind expenses, which was 6th.
Dealer sentiment on electric vehicle (EV) sales is mixed, with dealers rating the EV market at 54, the same as the score a year ago and down for the second quarter in a row after reaching 61 in the fourth quarter of 2022.
