🗞️ Industry roundup:
FROM PR NEWSWIRE: Spring optimism boosts U.S. automobile dealer sentiment, despite weak profits, growing costs
U.S. auto dealers are entering spring with increased optimism, as the market outlook index for Q1 reaches 58, the highest since 2022, indicating growing confidence for the next three months. While conditions have improved slightly from last year, profitability remains a concern, with the profit index dipping from 35 to 34. Independent dealers continue to face challenges in used-vehicle sales, reflected in an index score of 41. Although expectations for the electric vehicle market have slightly improved, most dealers still anticipate a decline rather than growth in the near term.
FROM NPR: Automakers brace for higher costs as steel and aluminum tariffs kick in
The U.S. government has expanded steel and aluminum tariffs, with a 25% tariff now applying to all steel imports and aluminum tariffs increasing from 10% to 25%. Automakers must either pay more for imported materials or source domestically, both of which will drive up production costs. For dealerships, this could mean higher vehicle prices and potential shifts in consumer demand. More tariffs, possibly on cars, are expected to be announced on April 2.
FROM ISEECARS: Used EV prices plunge 15%, with Tesla leading the way
Used gas and hybrid vehicle prices have stayed steady, while used electric vehicle prices continue to decline. Over the past six months, used electric vehicle prices have dropped between 15% and 20% each month, with Tesla models losing 13.6% in value on average. Meanwhile, some used vehicles saw their value increase, particularly luxury models, with the Infiniti QX60, BMW 4 Series, and Land Rover Discovery leading the list.
FROM AUTO REMARKETING: Dealership buy-sell market hits another record in 2024
In 2024, dealership buy-sell activity hit a record 438 transactions, up 10% from 2023. Despite a 32% drop in dealership profits in early 2024, they remained 78% above pre-pandemic levels when adjusted for inflation. Strong brands like Lexus, Toyota, BMW, and Honda maintained high margins and low inventories, while weaker brands like Lincoln, Nissan, and Stellantis faced rising costs and declining values. With strong buyer demand and improving earnings, the buy-sell market is expected to stay active, making franchise selection critical for dealers moving forward.
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