Executive Dealer Reporting

Top Headlines We Are Reading At Foundation

June 2024 New Vehicle Sales Forecasts are In from JD Power

• Total new-vehicle sales for June 2024 are projected to reach between 1,336,800 and 1,273,600 units, a 2.6% to 7.2% decrease YoY from June 2023 and a 9.2% MoM decrease from May 2024.
• The SAAR is projected to be between 14.7 and 15.4 million units! This is down YoY from June 2023 between 0.7 and 1.4 million units and down 0.9 million units from May 2024
• New Vehicle Total Sales for the first half of 2024 are projected between 7,794,500 and 7,857,700, which is a 1.7-2.5% increase YoY.
• What does this mean?: New Vehicle sales in the first half of 2024 are off to a great start and historically the second half of the year has a larger New Vehicle sales volume than the first half of the year. With that said, we believe it is likely that New Vehicle Sales will exceed 16 millions units by EOY despite JD Power’s forecasts.

• Additionally, JD Power anticipates that the outage of dealer software systems will result in July purchases that otherwise would have been made in June.

• New inventory is projected to finish around 1.8 million units, a 4.5% increase from May 2024 and a 41.6% increase from June 2023.
• What does this mean? Inventory continues to come in and is keeping up with sales demand. Inventory availability in July will help compensate for delayed sales in June.

• Transaction prices are trending towards $44,857—down $1,372 or 3%—from June 2023 and a slight decrease from May 2024 transaction prices of $45,033
• Total dealer profit per unit is expected to be $2,407, down 32.3% from June 2023 and down 2.6% from May 2024’s $2,471.

• Only 16.9% of New Vehicles were sold above MSRP, down 34.9% in June 2023

• Incentives were on par with May 2024, and are up 51.2% from June 2023 to about $2,625 per vehicle.

• Much of the growth in incentives comes from increased availability of lease deals. The result is that leasing is growing, accounting for 22.7% of retail sales, up from June 2023’s 20% of retail sales.

• What does this mean?: Dealers are going to be searching for profitability, which could mean cutting cost. There are unturned stones in service and search still remains the lowest cost-per-acquisition for dealers. Additionally, leasing is becoming an opportunity for dealers to capitalize on.

• Monthly EV retail share of sales is sitting at 8.4%, a slight decline from May 2024 and consistent YoY.
• With that said, 96% of BEV are likely to consider purchasing/leasing another BEV, with as low as 20% of current BEVs considering defecting back to a gas-powered vehicle.
• Additionally, 87% of current PHEV owners are likely to consider purchasing/leasing another PHEV, and only 44% of PHEV owners are likely to consider purchasing a gas-powered vehicle.
• What does this mean?: Interest in EVs remains consistent and share of sales declines slightly for EVs, but more model options and increased incentives may help capture new customers. Those already familiar with BEVs and PHEVs are likely to stay loyal to these segments, and remain opportunities for dealers to capitalize on.

 

Experian State of the Automotive Finance Market Report Released March 2024

• • Vehicle Leasing rebounding back to pre-covid levels with 22.5% of new vehicles were leased compared to 17.2% YoY.
  • Captive finance through OEMs has #1 share from auto purchasers at 32% for total market, and 61% for new purchasers
  • EVs are 8.5% of sales with 30% of EVs being leased, which is a higher rate than ICE vehicles. Tesla share of new sales while down still commands 50% of total EV sales.
  • Average loan amount per consumer continues to grow at $738 per month vs. $720 YoY. This aligns with interest rates that are at 7.2%, up from 6.1% in the previous year.

• Q1 2024 Release- Cox Automotive Car Buyer Journey Study

  • Foundation’s Quick hit Takeaways:
    • Slide 5 – Shoppers continue to visit 2 dealerships on average
    • Slide 6 – Importance of Dealership websites rebounds since COVID with the highest mark ever of 63% of auto shoppers saying they visited a dealership website, #2 behind third-parties (careful of this data point as this is a third-party website owned study).
    • Slide 11-14 – Overall improvement of for trends of dealership experience and satisfaction.
    • Slide 18 – Auto shoppers spend nearly 7 hours shopping online — more than  2x than they do at purchasing dealership.