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From the Newsroom, a roundup of news from Cox Automotive and perspectives from its analysts and experts on topics dominating the automotive industry.
We hope everyone enjoyed celebrating Independence Day, America’s 246th birthday, with food, fireworks, family and friends.
There was certainly less to celebrate when it comes to auto sales, which closed out June and the first half with greater declines than the Cox Automotive Industry Insights team anticipated. June sales came in at approximately 1.125 million; our forecast was for 1.2 million. Cox Automotive commentary, published yesterday, highlights that Buick, Honda, Mazda and Nissan reported noteworthy sales declines. The one bright spot was Ford.
In the latest Auto Market Report video, Cox Automotive Chief Economist Jonathan Smoke reassures the industry: “While media have unrelenting headlines focusing on a recession unfolding, we are not seeing evidence of retail demand collapsing.”
In this newsletter, we’re offering a roundup of material the team created for the Cox Automotive Mid-Year Review event on June 28. Before the holiday, Smoke and the Industry Insights team provided a deep dive into the economy and auto industry for the first half. They also released the June U.S. auto sales forecast and a mid-year update to the full 2022 Cox Automotive forecasts and 2022 predictions.
In Who Will Automakers Listen To – the Angels or the Devils?, a recent opinion piece, Brian Finkelmeyer, our new-vehicle sales strategies expert, explains why he’s not convinced automakers will limit inventory to hold onto newfound pricing power once new-vehicle inventory starts flowing freely again.
Join us: Register for the Q2 Manheim Used Vehicle Value Index call on Friday, July 8. Smoke and Kevin Chartier, vice president of Manheim Consulting, will discuss the latest Index and the trends that shaped the quarter, and guest speaker Derek Hansen, vice president of operations for vAuto, will provide an update on Cox Automotive’s Upside.
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, and bookmark the Auto Market Snapshot, a one-stop dashboard for the data our team is tracking.
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COX AUTOMOTIVE LOWERS FULL-YEAR NEW-VEHICLE SALES FORECAST AS PERSISTENT SUPPLY PROBLEMS CONTINUE TO HOLD BACK AUTO INDUSTRY
The Cox Automotive Industry Insights team expected a year-over-year decline in June auto sales; however, the actual decline was even greater than anticipated. Sales last month came in at approximately 1.125 million; the forecast was for 1.2 million.
Some declines were particularly notable, with large year-over-year declines at Buick, Honda, Mazda, Nissan and others. The Honda drop was hard to ignore, with June sales being 54% lower than a year ago. The year-over-year decline last month was similar to Honda’s year-over-year drop in April 2020, when the global COVID pandemic had shut down much of the U.S. market.
As Cox Automotive Senior Economist Charlie Chesbrough continues to note, new-vehicle sales in the U.S. will continue to underperform expectations without a material change in inventory levels. Yes, the combination of high new-vehicle prices and ongoing inflationary concerns are slowing the market, but new-vehicle sales are primarily being held in check by low inventories.
Read the team’s updated commentary and the press release to find out how the automakers performed in the second quarter and first half.
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HIGHER DEPRECIATION CREATES BUYING OPPORTUNITIES
In his biweekly video, the Auto Market Report, Cox Automotive Chief Economist Jonathan Smoke notes: “Sales are limited in new with tight supply, high prices and low incentives, but that’s nothing new. Used sales are not as strong as last year but are holding momentum. With used supply relatively normal, prices are clearly showing depreciation and that actually creates buying opportunities for consumers. Consumer sentiment is indeed a bit worrying, but a strong job market favors stability and demand.”
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, depreciation patterns and Cox Automotive leading indicators.
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COX AUTOMOTIVE’S TEN PREDICTIONS FOR 2022 TAKE HOME A SOLID “B” GRADE IN THE FIRST HALF
As the first half of 2022 came to a close, the Cox Automotive Industry Insights team reviewed the market predictions we offered back in January and assessed how well we did. Our original Ten Predictions for 2022 are holding up well for the most part. We have fallen short on three items.
Check out Jonathan Smoke’s latest assessment of how each prediction is faring so far this year.
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WHO WILL AUTOMAKERS LISTEN TO – THE ANGELS OR THE DEVILS? Brian Finkelmeyer, Cox Automotive’s senior director of new-vehicle sales strategies, has been thinking about what might happen to the auto industry – eventually – when new-vehicle supply begins to flow freely again. Many speculate that automakers will work to limit inventory and hold onto newfound pricing power. Finkelmeyer is not convinced.
Read his thoughts in an article published last week: Who Will Automakers Listen To – the Angels or the Devils?
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Looking ahead: In addition to June fleet sales, Cox Automotive will report the June Manheim Used Vehicle Value Index (MUVVI) on Friday, July 8, and host the Q2 MUVVI call. Register to attend. If you can’t make the live webinar, be sure to register anyway, and we’ll send you the recording.
We will publish new content on June Kelley Blue Book average transaction prices, new and used inventory, and updates to the Dealertrack Credit Availability Index and Cox Automotive/Moody’s Analytics Vehicle Affordability Index the week of July 11.If you have questions or want to connect with the Cox Automotive PR team in the meantime, feel free to contact us.
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AUTO QUOTES “The U.S. consumer could be talked into a recession. The Fed and numerous high-profile CEOs are working hard to sell that scary story. The consumer is 70% of the economy, and we’ve seen no evidence of the consumer dramatically pulling back. ”– Jonathan Smoke, Cox Automotive chief economist, refuting the idea that a recession is inevitable in 2022. Hear more in the Mid-Year Review replay.
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Source: https://www.theautochannel.com/news/2022/07/08/1165321-from-cox-automotive-newsroom-lower-sales-and-other-insights.html
