Kneading Through the Dough

The latest economic indicators present a mixed bag, but here’s a taste of where things stand:

• The GDP is showing some drag in its stride with a Q1 '24 forecast down to 2.4% from the previous quarter's 3.2%.
• The job scene's a bit of a roller coaster – unemployment was up to 3.9% in February from a low of 3.5% in March 2023.
• People were feeling pretty good about spending money in February, with consumer sentiment hitting 76.9 (though it dipped slightly in March).
• Auto loan rates continue to rise, with new car loan rates hitting 9.70% in March.

Consumer Reports’ brand loyalty study for 2024 just dropped, and it’s Rivian that’s charging ahead and stealing Tesla’s thunder (they held the #1 spot in last year’s ranking).

• Despite it being an adventurous newcomer, 86% of owners are eager to repeat a Rivian purchase.
• Mini made the most significant leap, climbing 11 spots, to secure the silver medal.
• At the opposite end, Infiniti faces challenges, with only 43% of owners considering a repeat purchase.

Consumer Reports broke out which brands have the most satisfied owners in even more specific areas:

Tesla took the top spots for overall customer satisfaction in Driving and Ownership Cost. The company also took the top spot in J.D. Power’s 2024 U.S. Electric Vehicle Experience Home Charging Study.

• Tesla maintains its lead, ranking highest in Level 2 permanently mounted charging stations for the fourth year running.
• Home charging satisfaction is up across the board, with Level 1 chargers seeing the biggest jump (+20 points).
• Despite satisfaction gains, users still report plenty of issues with the top problem being tricky internet/Wi-Fi connections and snail-paced charging speeds. Plus, nearly half of all EV owners are not clued into local utility programs that could help boost their charging efficiency and offset costs.

Dealer sentiments have shown a very modest improved in the first quarter of the year, with the Cox Automotive Dealer Sentiment Index ticking up from 40 to 42 in Q1.

• The market is shifting to favor buyers, challenging dealers to battle shrinking profits amid rising costs.
• The outlook for the next quarter is brighter, however, with a “spring bounce” expected to push the future market over the neutral line to 51.

Franchised dealers have seen a steep decline in their profitability index, now at a historic low of 41, down from highs above 80 in early 2022.