Mid-Week Auto News Update
Co-publisher's Note: The opinions and extrapolations contained in this Mid-week Auto News Update are the opinion of Cox Automotive. The Auto Channel may or may not agree with some or all of them but believes that a free press gives the option to agree or not agree to the audience not gatekeepers.
From the Newsroom, a roundup of news from Cox Automotive and perspectives from its analysts and experts on topics dominating the automotive industry.
Overall dealer sentiment in the U.S. improved slightly in Q2 2023, according to the quarterly Cox Automotive Dealer Sentiment Index (CADSI) released this morning. But the current market index indicates a majority of dealers feel today's auto market is weak, and the three-month, forward-looking market outlook index declined in Q2 after rising sharply in the first quarter. A majority of dealers expect the Q3 auto market will be weak, with overall sentiment weighed down by a tough economy and high interest rates.
However, it’s worth noting that the timing of the CADSI survey was before the debt ceiling deal was struck. In the Auto Market Report published yesterday, Cox Automotive Chief Economist Jonathan Smoke notes that, with the debt ceiling debate behind us, he is more optimistic that the summer could deliver added upside to the overall auto market.
Used-vehicle retail sales were steady in May compared to April but down double-digits year over year, and the used market has been losing momentum in recent weeks. The Manheim Used Vehicle Value Index (MUVVI) decreased again in May. As Chris Frey, senior manager of Economic and Industry Insights at Cox Automotive, notes, two data points do not make a trend. So stay tuned, and sign up for the Q2 MUVVI call on Monday, July 10, to learn more about the quarter’s trends.
Cox Automotive is taking one final look back at last year in our annual Cox Automotive Market Insights and Outlook (CAMIO) report. CAMIO provides a review of 2022 data and insights as well as 2023 Cox Automotive outlooks and forecasts for the new, used, and wholesale markets, plus certified pre-owned, fleet, credit, and repossessions.
Three Weeks To Go: Join us for the Cox Automotive Mid-Year Review on Tuesday, June 27, at 11 a.m. EDT.
We hope you find this selection of articles informative and helpful. Visit the Cox Automotive Newsroom for the latest on the industry’s most important topics. Bookmark the Auto Market Snapshot, a one-stop dashboard on the data our team is tracking.
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AS INVENTORY BEGINS TO FADE, ECONOMIC UNCERTAINTY AND HIGH INTEREST RATES TAKE CENTER STAGE FOR U.S. AUTO DEALERS
Overall dealer sentiment in the U.S. improved slightly in Q2 2023, according to the Cox Automotive Dealer Sentiment Index released this morning. The current market index is now at 45, up from 43 in Q1 but still below the threshold of 50, indicating that more dealers see the current auto market as weak than see the market as strong. The Q2 report is the fourth consecutive with dealer sentiment below the 50 threshold. Both franchised and independent dealers feel the market in Q2 is stronger than in Q1, but the continued negative sentiment is likely being driven by weak economic conditions and stubbornly high interest rates.
The forward-looking market outlook index declined in Q2, falling from 52 to 47, suggesting a majority of auto dealers now feel the market in the next three months will be weak, not strong. The market outlook index in Q2 for franchised dealers increased 1 point, moving from 56 to 57, while the outlook index for independent dealers declined from 51 to 44. Independent dealers, who sell only used vehicles, have a more negative view of the market for the months ahead.
Read the press release for additional details and download the full results.
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CONSUMERS CONTINUE TO SPEND, BUT SENTIMENT DECLINES
In his latest Auto Market Report video, Chief Economist Jonathan Smoke says the consumer is continuing to spend, particularly on services and vehicles, but consumer sentiment declined in May. New-vehicle sales were up 17% year over year last week, according to vAuto data; but the used-vehicle market appears to be losing more momentum.
Read the Auto Market Weekly Summary and watch the Auto Market Report video for more data and insights from Smoke on new and used retail sales and inventory, auto financing and Cox Automotive leading indicators.
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WHOLESALE USED-VEHICLE PRICES SEE CONTINUED DECLINES IN MAY
Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) decreased 2.7% in May from April. The latest Manheim Used Vehicle Value Index (MUVVI), which was published this morning, declined to 224.5, down 7.6% from a year ago.
“Price erosion continued in May, with another month-over-month drop in the index bringing it 0.3 points below our January result,” said Chris Frey, senior manager of Economic and Industry Insights for Cox Automotive. “Taking a longer view, May’s year-over-year decline accelerated from April and March; however, the rate of decline might slow over the next several months as we encounter the lower prices seen at auction from May through November last year. Two consecutive reads in either measure do not a trend make, as used retail inventory is still below last year, and that tends to keep buyers at the auction, supporting prices.”
See the Data Point for additional details on Manheim Market Report values and market segments. Register to attend the quarterly Manheim Used Vehicle Value Index call, which will be held on Monday, July 10.
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2023 COX AUTOMOTIVE MARKET INSIGHTS AND OUTLOOK REPORT AVAILABLE
The 2023 Cox Automotive Market Insights and Outlook (CAMIO) report provides a look back at the data and trends from 2022 and a look forward to how 2023 is progressing, including the most recent Cox Automotive forecasts and predictions. This report comprises multiple chapters covering the backdrop to the overall auto market plus the new, used, and wholesale markets, as well as franchised dealers’ service lanes.
Check out the just-published 2023 CAMIO. Plus, earlier versions of the CAMIO can be found in the Cox Automotive Newsroom.
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REGISTER TO ATTEND THE MID-YEAR REVIEW
The Cox Automotive Mid-Year Review will be hosted Tuesday, June 27, 11 a.m. EDT, shortly before the auto industry closes the book on a volatile first half.
During this webinar, our experts and analysts, led by Chief Economist Jonathan Smoke, will review how the auto industry performed in the first half of the year and how the Cox Automotive team sees the industry progressing, including a quarterly update to our 2023 forecasts.
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Looking ahead: Later this week, we will publish the May Dealertrack Credit Availability Index and the Industry Insight team’s Monthly Industry Update video.
Next week, we will report on Kelley Blue Book’s average transaction prices on Monday, June 12, ahead of the CPI report. We will publish Jonathan Smoke’s take on the latest monetary policy decisions from the Federal Reserve on Wednesday, June 14, followed by May updates to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index and new and used inventory levels, including average listing prices, from vAuto data. We will also report Cox Automotive’s monthly estimated used-vehicle sales on Friday, June 16.
Don’t hesitate to contact us if you have questions or want to connect with the Cox Automotive PR team.
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AUTO QUOTE
“Our latest dealer sentiment index clearly illustrates how the market has shifted in the past year. The new-vehicle market’s most acute inventory issues are in the rearview mirror now. Dealers are now facing an uncertain economy and high loan rates that are keeping many would-be buyers on the sidelines.”
Jonathan Smoke, chief economist, Cox Automotive, speaking on the Q2 Cox Automotive Dealer Sentiment Index.
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