Topic: industry news
3 Supply concerns plaguing the auto industry in the US — and how to keep them from impacting the shopping experience
The Covid pandemic remains top of mind for most Americans as infections continue to spread across the country. However, sales figures indicate that the auto industry is weathering the latest pandemic challenges reasonably well: total vehicle sales surged to 17.7 million in March – 5% higher than pre-pandemic sales numbers in January 2020.
Even with sales moving in the right direction, though, several issues threaten the stability of the new vehicle market in US in the coming months. Since it pays to be prepared, here’s a look at the supply concerns for the US auto industry that are currently making the news.
More than ever, dealerships are being forced to adapt to constant changes. In a recent Dealer Marketing Magazine article, Ashley Karr, CarGurus’ VP of Global Dealer Marketing, interviewed Joseph Davis, the E-commerce Director at Ewing Automotive Group. They spoke about his process for handling internet sales leads and his actionable advice for sales and marketing leaders at other dealerships.
Check out the full article:
Our Director of Automotive Industry and Economic Analysis, George Augustaitis, provides insight into how forgiveness of student loans could impact vehicle sales in the US.
Debt continues to increase while wages lag, and many Americans struggle to purchase a new car. In fact, affordability represents the most severe headwind causing the decline in vehicle sales, which are down 2.0% calendar year to date (CYTD) 2019.
A recent survey from Bankrate finds that 58% of Millennials and 56% of all Americans lose sleep over money troubles. Today, 40% of Millennials earn at least half their income from a side hustle. Millennials are the largest living adult generation as of 2019, and they represent a key demographic in the success of the new and certified pre-owned (CPO) vehicle market. However, an increasing number of Millennials indicate that cost pushes them away from purchasing a new vehicle. Knowing this, increasing Millennial disposable income would lead to a rise in the new-vehicle market.
For Millennials, student loans represent the primary reason for their low disposable income. An estimated 44.7 million people in the US have student debt, which amounts to 1 in 4 Americans. With the estimated student debt at $1.49 trillion and the average monthly payment at $393, the increasing amount of student debt shapes affordability significantly more than wages, housing costs, and the rising price of vehicles.
Because of the new-vehicle sales slowdown during the Great Recession, finding affordable used-vehicle inventory has been a challenge for today’s dealers. Automotive News dug into CarGurus analysis to offer insight into the impact on the current car-buying market. Check out the full article:
For many drivers, getting in the car follows a routine: use a key fob to unlock the car door, get into the driver’s seat, connect a smartphone to the car’s infotainment system, and then drive off. Yet, when tested on their knowledge of connected vehicle security, consumers were wrong on half the answers, scoring a failing average of 49%.
At CarGurus, we’re always looking for ways to share more industry insights with our valued dealers. Today, our Director of Automotive Industry and Economic Analysis, George Augustaitis, takes a look at how tax cuts and dwindling inventory are affecting the used car market.
The IRS started to release information on tax returns in the first week of February. As the data from the IRS changed over time, the media released weekly headlines, whipping back and forth between negative and positive:
To date, the IRS has reported filings through the week ending May 10, 2019, and at first glance, the average refund is down 1.7%.
While the key metrics—total number of refunds, amount of money issued, and average refund—show a negative story, refunds alone aren’t the factor driving change in used car sales in the US.
For the second year in a row, CarGurus surveyed consumers to get a pulse on their feelings toward self-driving cars. While most aren’t ready for them to be the status quo, the survey found that consumer sentiment is changing fast, with enthusiasm rapidly replacing skepticism. Overall, the survey found: