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Alpha Warranty MarketingQ3 2023 ~ Industry Report
The EconomyData from www.coxautoinc.com
The EconomyData from www.coxautoinc.com
Factors holding back businessData from www.coxautoinc.com
Q3 EV Sales EstimatesEV sales continue to climb, estimated to reach almost 8% share of sales in Q3/Q4Data from www.coxautoinc.com
2023 September Consumer SentimentData from Conference Board• Customer sentiment is slightly less pessimistic in September.
2023 Forecasts, Q3 UpdateNote: For context, final 2022 forecasts are included.Data from Cox Automotive9.2% 5.8%27.2%4.0% 9.5%22.7%.28% 0%-48.8%Data from www.coxautoinc.com
New Sales• September 2023 sales finishes near 15.5 M units (up from 13.6 in Q3 of 2022)• Down 4.4% from Q2 2023Industry Metrics17.711.618.21415.417.613.215.713.515.617.716.612.713.615.517.516.913.113.82019 2020 2021 2022 2023Q1 Q2 Q3 Q4Millions of unitsData from Cox AutomotiveSales up nearly 14% YTD, but dipped from Q2 – headwinds likely to slow market in Q4Data from www.coxautoinc.com
New Vehicle InventoryIndustry Metrics• Currently 813,000 more units than 2022.• Days of supply at 57 – up 33% from 2022Data from Cox AutomotiveData from www.coxautoinc.com
Sales Channels / Fleet Sales Drive GainsPent-up rental and commercial demand, not consumers, is key to market’s successData from www.coxautoinc.com
Used Sales + Average Used Supply LevelsIndustry Metrics• Used Sales- Total supply at 2021 levels, down 10% from 2022.- Day’s supply at 44.4, lowest since early Spring 2023Data from Cox AutomotiveData from www.coxautoinc.com
Average Used PriceIndustry Metrics• Average Used Price- Below $27,000- Down -5% from Sept. 2022Data from www.coxautoinc.com
Affordability Gap for New & Used VehiclesData from www.coxautoinc.comIndustry MetricsAverage payments up 23-39% since 2019 and now out of reach for many households
Data from www.coxautoinc.comIndustry Metrics
2023 Q3 – Electric Vehicle SalesData from Cox AutomotiveEV sales continue to climb, estimated to reach almost 8% share of sales in Q3. Data from www.coxautoinc.com
2023 Q3 – Electric Vehicle InventoryData from Cox AutomotiveData from www.coxautoinc.com
2023 Q3 – Electric Vehicle Prices DropData from Cox AutomotiveData from www.coxautoinc.com
Industry Need to Knows…UAW Update• Sept. 29, 2023 – The United Auto Workers called a strike against the major domestic automakers and begun disrupting new vehicle production and parts distribution. Thus far, the impact has been fairly muted. The UAW strike which was expanded on Friday with new targets at Ford and General Motors is clearly a major factor that could, if it persists, disrupt the trends we have been observing through the first three quarters of 2023. Progress on normalization could give way to tightening supply and increasing prices for both new and used.• It is very hard to predict what will happen with this strike. The sides remain far apart on multiple issues. The “Stand Up” tactic by the UAW minimized the initial disruption, impacting only three production sites at first, but now the impact is beginning to grow. Recently, the UAW took aim at parts distribution facilities for GM and Stellantis across the U.S., sparing Ford, a tactic that is clearly intended to ratchet up pressure on the automakers’ bottom lines – the parts business is highly profitable – and also disrupt business at dealerships and directly impact consumers, who may see longer waits for repairs and service.[READ MORE]The Federal Reserve Left Rates Alone – For NowAs expected, the Federal Reserve left its short-term rate policy unchanged at their September meeting. However, they made it clear that additional rate hikes could come as they remain “highly attentive to inflation risks.”The Fed also upwardly revised economic forecasts, and their revised views of GDP and the unemployment rate imply that the Fed no longer expects a recession to occur. Their revised dot plots suggest that rates will remain high for longer. Rate policy is only expected to decline by 50-75 BPs in 2024 and by another 150 BPs across 2025. That would leave rate policy at the end of 2025 at 3.875%, a half point higher than their last forecast and higher than any policy level since 2007.[READ MORE]
Industry Need to Knows…Asbury agrees to buy Jim Koons group for $1.2 billionAsbury Automotive Group Inc. on Friday said it has agreed to spend $1.2 billion to purchase Jim Koons Automotive Cos. in a deal that would be one of the largest in auto retail history.The transaction agreement announcement, which will consolidate a top 25 dealership group into the publicly traded Asbury, comes just threedays after Asbury said it was in talks to buy the group.It also comes two years after a boom of megadeals in the auto retail space, including Asbury'sacquisition of the Larry H. Miller Dealerships.[READ MORE]Leverage dealership service department for F&I salesFinance managers can sell more finance-and-insurance products by working with their dealership'sservice department, Zurich North America trainers said."Go spend time with your [service] advisers," Matt Dinsmore, regional income development executive at Zurich, told an F&I training session in June. "It'll better you for what you're selling. You'll learn technical terms. You'll learn problems that are reoccurring and current."Train service personnel to refer customers no longer covered by a manufacturer's warrantyto the finance department for a vehicle service contract.[READ MORE]
F&I NEWS & UPDATESEnable Sales Staff to Present F&I Earlier in ProcessIt has been well-established that the importance of selling F&I products is currently at an all-time high. From helping to further boost profits and offsetting floor-planning cost erosion, to solidifying higher customer satisfaction through better protection of investments, F&I is a cornerstone of any retailer’s success.• It’s certainly important to have the right F&I product options that best fit your vehicle inventory. F&I products are not a one-size-fits-all menu, so it’s pivotal to have a menu lineup that will address the needs of each buyer.• Aside from the products themselves, more retailers are taking a closer look at the process of selling F&I products when customers are closing the transaction – most likely still in the showroom. Yes, online research and digital retailing are growing, but many of today’s final transactions still take place inside the showroom walls.• Empowering Sales Staff Is Key to F&I Success By communicating the value of auto financing and insurance earlier in the conversation, dealerships can make a stronger case for the value of these supplemental offerings.• Training Makes All the Difference Offering sales personnel many opportunities for training and skill development is one of the best ways to enhance interdepartmental collaboration and position dealerships to promote from within.[READ MORE]
Technology DevelopmentsImpel Launches AI-Powered Virtual Photo Booth for Auto Retailers & OEMs• Impel, the global leader in AI-powered customer lifecycle management and digital merchandising for the automotive industry, announced today that it has released a fully-automated Virtual Photo Booth and Image Enhancement solution that enables dealers and OEMs to deliver branded, studio-grade vehicle photos and 360° walkarounds without investing in expensive physical booths. Powered by state-of-the-art Computer Vision AI technology, Impel's automated imaging solution optimizes image and video quality, removes background clutter, and ensures compliance with OEM-mandated imaging requirements.• The company's AI-powered Virtual Booth technology delivers an authentic photo booth viewing experience without the need for capital investments, additional hardware or dedicated physical space.From AutoNews• Carvana adopts Texas DMV's electronic odometer, sales disclosure tool• Carvana Co. said it adopted a Texas Department of Motor Vehicles tool that cuts out the need for state officials to review physical paperwork.
Technology DevelopmentsHow to Truly Establish a Digital Presence for Used AutosThe auto industry has been laser-focused on digitizing the retail shopping experience for several years, especially since the pandemic. However, the right digital retail strategy for today’s used-vehicle dealer goes beyond up leveling a dealer’s web presence. This thinking has evolved, and many in the industry now realize that the sweet spot consumers want when shopping for a car will take a true omni-channel approach – where customers want to research and build deals online but still appear in the showrooms at some point in the process when it’s convenient.[READ MORE] from F&I Magazine
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