Automotive News Mid-Week Updates
Fed Chair Jerome Powell’s press session today won’t be as passionate as a Shawn Fain event, and we aren’t expecting Powell to throw any R-rated tweets into the mix, but his words will be important none the less. Most economists are expecting the Fed to hold steady, even though there’s been no shortage of data suggesting inflation remains alive and well, and well above the Fed’s target. Cox Automotive Chief Economist Jonathan Smoke will be tuned in. Look for his commentary later today in Smoke on Cars.
The Fed rates are currently considered restrictive, and budget-busting auto loans are likely slowing what otherwise might be a more robust retail sales recovery. The average new-vehicle loan rate remains well above 9%; it’s over 13% for used. New-vehicle affordability has improved of late, but remains the industry’s biggest challenge; the UAW strike won’t help.
And all the while, the Fain train keeps on thundering, with threats of new Stand Up strikes coming on Friday as the rolling blackout keeps everyone guessing. As Smoke notes in his initial thoughts on the UAW strike, “The UAW’s strike plan is designed to shift strike locations – start and stop as required – which could possibly stretch this strike out longer than experienced in the past, but also have less of an immediate volume impact.” Indeed, at this point, less than a week into the strike, it is too early to measure any material impact on dealer stock and new-vehicle sales. Inventory in early September was healthy.
The team will have more to say next Tuesday, the 26th, when we hold our quarterly forecast call. We hope you will join us as we share our perspective on industry performance in Q3 and address the key factors that continue to challenge the industry. If you have not already, RSVP here for the Q3 Cox Automotive Industry Insights and Sales Forecast call.
UAW workers on strike. A gov. shutdown looming. COVID cases on the rise. Credit card debt is through the roof, and the Detroit Lions won’t have an undefeated season, as many riding the pre-season hype train had hoped. You might think there’s only bad news out there.
And through this haze of media misery, Brian Finkelmeyer, our senior director of New Car Solutions, notes, “…the new car business continues to resist gravitational forces with solid sales and robust profits for dealers and automakers alike.”
Indeed, we are reminded once again that the automobile business is the greatest business, as Americans, through it all, tend to find a way to buy new vehicles. Fewer than before, perhaps, but still the new car dream remains. You can read the latest from Finkelmeyer in the Newsroom.
The New-Vehicle Market Continues to Defy Gravity.
As always, thanks for your interest in Cox Automotive and for following along. If you’d like to catch up with anyone from Cox Automotive, feel free to contact our Communications Team. We’d be happy to help.