| Are the dealer fun times coming to an end? |
Dealers fear that optimal economic conditions, after three years of solid profits, are getting worse.
And while demand for both new and used cars is strong, we’re seeing and hearing more about how demand dynamics have changed.Thanks to inflation and higher interest rates. So cash-strapped buyers are no longer willing and able to enjoy paying as much for a used car as they would for a new one.
Franchise dealers see proof of that. Their concerns about this evolving sales environment take center stage in this week’s print issue.
car news conducted its 2023 Dealer Outlook Survey in January. The majority of his 264 dealers and dealer managers who participated (his 70% of respondents) said rising interest rates were their top concern. Potential economic recession and vehicle affordability are tied for the second most worrying factor, chosen by approximately 42% of respondents. Dealers can select up to three concerns.
Affordability was also in mind for dealers, analysts and business executives at the NADA Show in Dallas.
All things considered, different prospects prevail.
Around 44% of respondents are concerned that profits will deteriorate in 2023. Nearly 30% expect profits to remain flat compared to 2022.
It is not yet known how much demand will decline in 2023. If a recession hits, we’ll bring you coverage of how it will disrupt dealer sales operations.
One thing is for sure, the dealer is smashing through the hatches.
— CJ Moore