May Data Dips

Our pal, John Ellis, over at the Automotive Advisor Team is all about that data. 📊

Last month was a bit of a doozy. 😵‍💫

Reports showed a bit of a slowdown in both new and used car sales last month, a shift that may have significant implications for dealers' supply and inventory. But, only if you aren’t prepared. 

🌟Here’s what you need to know to help adapt your strategy: 🌟

🔎 Economic Outlook — 

• Wage growth: Increased by 4.3% YOY, but the overall data suggests a softening labor market.
• Inflation is easing: The Federal Reserve will continue to pause their interest rate hikes (after 15 months of consecutive increases).

🔎 New Car Outlook – 

• Days of supply: Stable at 55, 46% higher than last year.
• Sales: Dipped slightly in May, pushing up supply, but still 11% above last year.
• Prices: Holding strong, though trending down slightly in recent weeks.

🔎 Used Car Outlook – 

• Days of supply: Maintaining spring levels at 47, and the average listing price is slightly up.
• Sales: Were down by 30K from last week, 8% below last year.
• Prices: Average listing price slightly up with affordability still a major roadblock for buyers.

🔎 Wholesale Outlook – 

• Index depreciation: All model years depreciated week over week. 5-6 year old models depreciate the least. 
• Auction sales: Efficiency increased by 50% after successful Memorial Day sales showing that dealers are eager to replenish their inventory.

🔎 Retail Margin Outlook – 

• Prices: The average retail price for Model Year 2020 dropped by $68, while the average wholesale value decreased by $249.
• Acquisition: Despite the market drop, there is still lots of opportunity in wholesale channels.