Market Mechanics

Economic Indicators:

• Job Market — While job growth is slowing, the market remains historically tight. Interestingly, wage growth has been outpacing inflation since April.
• Consumer Credit — There was an increase of $9.06B in September, a bounce back from the previous month's decline, driven by auto loans, student loans, and credit card debt.
• Consumer Sentiment — It's seen a recent drop, influenced by rising interest rates and gasoline prices.

Sales Trends:

• New Vehicles — Sales in October increased by 1.5% year-over-year, despite a month-over-month drop of 9.6%.

Inventory:

• New Vehicle Supply — Despite strikes, new vehicle inventory began November higher than early October. The US supply of unsold new vehicles climbed to 2.40M units, a 62% increase from the previous year.
• Used Vehicle Supply — Used-vehicle inventory volume at the start of November was slightly higher than in early October but days’ supply remained flat at 49.

‍Retail Price Trends:

• Stabilization — Price changes across categories were minimal, suggesting a leveling-off period. Particularly, vans and minivans saw a decrease of $150, while SUVs and cars dropped by about $100.
• Hybrid and EV Prices — These vehicles have seen a marginal decrease, and their prices appear to have bottomed out, down 17.5% from last year.

Affordability:

• Balancing Act — Higher interest rates are somewhat counterbalanced by increased sales incentives from manufacturers.
• Baby Steps — Auto credit availability improved slightly in October but remains tighter than in previous years.