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COX Automotive News Summary – October 29, 2021 – The Auto Channel


Welcome to From the Newsroom, a roundup of news from Cox Automotive and perspectives from its analysts and experts on topics dominating the automotive industry.

Chief Economist Jonathan Smoke reports in the Auto Market Report video published this morning that new-vehicle sales have clearly stabilized so far in October with inventory slowly improving. Cox Automotive leading indicators on shopping activity, credit applications and service appointments are mixed but stable so far in October.

The Industry Insights team is still uncovering interesting findings in Q3 data. In addition to our 10 takeaways from the quarter, we published a comparative analysis of the six major automakers in the U.S. yesterday, and market performance reports on Ford Motor Company and General Motors were published this morning. 

Data show electrified vehicles surged past 1 million units sold through the third quarter, which is all the more interesting with Hertz announcing yesterday that it will purchase 100,000 Teslas. Reacting to the news, Lea Malloy, head of electric vehicle battery health solutions at Cox Automotive Mobility, said: The Hertz-Tesla tie-up is an indication that there is growing consumer interest in the idea of going electric. With high gas prices and proven lower operating costs, this is likely a smart play by Hertz. And a smart move by Tesla too, as it will introduce far more consumers to the growing Tesla brand, including those who reside in places where Teslas are not sold.”

Vehicle prices hit record highs – listing prices in September for both new and used vehicles as well as mid-month October used-vehicle values in the wholesale market. Meanwhile, new-vehicle inventory dropped below 1 million units while used-vehicle inventory improved slightly.

Continuing our quest to be the go-to source for data and insights that drive the auto industry, Cox Automotive launched two Xtime metrics to measure service department activity. The new Repair Order Volume Index and Repair Order Revenue Index will be updated around the 20th of each month and are included in the Auto Market Snapshot, a one-stop dashboard for data the Industry Insights team is tracking.

We hope you find this selection of articles informative and useful. Visit the Newsroom for the latest on the industry’s most important topics.


 

HIGHLIGHTS FROM U.S. AUTO SALES: Q3 2021

The third quarter of 2021 ended a few weeks ago, and the Cox Automotive team is still sifting through data to help showcase how the market performed. In the U.S., six major automakers accounted for 74.7% of the total Q3 sales volume, down from 76.7% in the same period of 2020. The market witnessed big shifts in the quarter, though, driven mostly by inventory management issues across the board, and Detroit brands are now mostly out of the traditional sedan segments, significantly impacting their overall share.

See the Data Point published yesterday for a comparative view of how the Big 6 performed in three top-line sales metrics – sales volumes, average transaction prices and incentive levels. And read the market performance reports for Ford and GM published this morning ahead of their financial announcements. Check back tomorrow for a report on Stellantis and starting next week for reports on the major Asian brands.


STILL GROWING: IN Q3, SALES OF ELECTRIFIED VEHICLES SURGED PAST 1 MILLION UNITS

While sales of new vehicles declined 13.4% year over year in Q3 due primarily to low inventory and high prices, sales of electrified vehicles jumped by nearly 60%, according to an analysis by Kelley Blue Book. In fact, more than a million electrified vehicles have been sold so far in 2021.
 
Sales of electrified vehicles – the combined total of electric vehicles (EVs), hybrids and plug-in hybrids – accounted for 10.4% of total vehicle sales in Q3, according to Kelley Blue Book, which is an all-time high.
See the full report for more details.
 
Worth noting: Cox Automotive Mobility’s latest white paper entitled 
Yes, the Electric Era is Here and It’s Good for People and the Planet explores the sustainability revolution that is underway, with EVs playing a significant role in transportation.

CONSUMER SENTIMENT FALLS, BUT THE AUTO INDUSTRY REMAINS STABLE

Falling consumer sentiment appears to be related to rising prices across the economy as supply chain challenges impact many sectors, including the new-vehicle market. However, new-vehicle sales have stabilized in October. New-vehicle sales were down around 30% last week compared to the same week in 2019, according to Dealertrack data, and inventory is slowly improving.
 
As reported below, retail pricing of both new and used vehicles set record highs in September. In the wholesale market, the average price paid for a model year 2018 vehicle, in excess of $30,000, continues to exceed the average retail price.

Read the Auto Market Weekly Summary and watch the Auto Market Report video to find out more from Smoke on the economic and industry indicators.


LISTING PRICES SET RECORDS; NEW-VEHICLE INVENTORY FALLS BELOW 1 MILLION UNITS, USED INVENTORY IMPROVES
 

New-vehicle supply fell in September to new lows – fewer than a million vehicles were available for sale – and the average listing price set another record, surpassing $43,000, according to a Cox Automotive analysis of vAuto Available Inventory data. The days’ supply of unsold new vehicles was 30 as October opened, down 26 days compared to the same time in 2020. See the new-vehicle Data Point for details.
 
Used-vehicle inventory improved modestly in September, edging up to 2.30 million units as the average listing price kept climbing, approaching $27,000. The days’ supply improved to 43, similar to year-ago levels.
See the used-vehicle Data Point for details.

 

SMOKE ON CARS: NOTES FROM THE Q3 2021 MANHEIM USED VEHICLE VALUE INDEX REPORT

During the Q3 2021 Manheim used Vehicle Value Index (MUVVI) call held earlier this month, Chief Economist Jonathan Smoke and the team covered a significant amount of material. The Q&A session was robust, which we appreciate, and we ran out of time due to the volume of questions.
 
While reviewing the remaining questions, we noticed that most fell into four major categories: weakening sales, pricing, off-lease volumes and certified pre-owned.

 
Check out this Smoke on Cars post to see responses to the most-asked questions.
 
ICYMI: Wholesale used vehicle prices increased 8.3% in the first 15 days of October compared to the month of September. This brought the Manheim Used Vehicle Value Index to 221.8, a 37% increase from October 2020.
See the Data Point for additional details and look for the full month of October report, which will be published on Friday, November 5.


XTIME LAUNCHES METRICS TO TRACK SERVICE ACTIVITY

Revenue from vehicle sales is just one part of a dealership’s overall profitability picture, with fixed ops representing more than half of the average franchised dealer’s gross profit, according to National Automobile Dealers Association data.
 
To track service department activity, Cox Automotive turned to its colleagues at Xtime, makers of end-to-end software solutions that help dealers deliver the ultimate service experience and facilitators of more than 10 million service appointments each month.
 
From this flow of service department data, and working with the data scientists at Cox Automotive, the Xtime team developed two new metrics – the Repair Order Volume Index and the Repair Order Revenue Index – to quantify average service department performance over time.

 
Check out this Data Point to see the September results and to learn more about these metrics that will be updated around the 20
th of every month.


Looking ahead: Later this week, Cox Automotive will report its October U.S. auto sales forecast. Market performance reports – covering sales volume, average transaction prices and sales incentives – on the major automakers will be published ahead of their financial reporting. An analysis of October sales incentives will be reported before sales day which is Tuesday, November 2. Check back on the Newsroom next week for the Q3 Kelley Blue Book Brand Watch Report on the non-luxury segment.

As always, if you have questions or want to connect with the Cox Automotive PR team, feel free to contact us.

AUTO QUOTES

“With such a big commitment, Hertz must be confident in the potential for rental demand, which says a lot about evolving consumer confidence and acceptance of EVs. Tesla will have to carefully manage where these vehicles end up once they are de-fleeted, but that’s a longer-term issue. For now, this looks positive for Tesla and consumers, as we believe consumers are ready to have ‘green’ choices when renting.”  
 
– Lea Malloy, head of electric vehicle battery health solutions, Cox Mobility, speaking about the announcement that Hertz is purchasing 100,000 Teslas.

Source: https://www.theautochannel.com/news/2021/10/29/1064710-cox-automotive-news-summary-october-29-2021.html

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