Economic Outlook: Source

  • The market outlook index in Q4 for franchised dealers dropped 12 points to 46, sinking below the 50 threshold and hitting an all-time low. The outlook index for independent dealers dropped one point to 40.
  • Yet consumer confidence is at 90% which is as high as January 2022 and 2% less than the highest in 3 years so 92%.
  • Those two conflicting metrics show us that having a growth mindset when the market feels depressed is where you take market share.

Wholesales to Retail Trending: Source

  • Three-year-old lane efficiency is slightly lower than most previous years while 6-year-old lane efficiency is slightly higher than in previous years.
  • Used car sales started in January mixed with a days’ supply at 47 days.
  • Affordability will drive demand in the first half and older inventory will find its way to dealerships with trade-ins on trade ups.
  • Conder each vehicle on its own when it comes to recon and certification fees.

Summary: Source

  • The Repair Order Revenue Index for November was 133.7, reflecting a 1.5% decrease.
  • This index shows a 3.5% increase year over year and a significant 36.4% increase from October 2019.
  • The steady upward climb of the revenue index, in part at least, is due to overall inflation which has raised the costs of goods and services.
  • There is a projected surge in used car sales, with a robust growth rate of 9% expected between 2019 and 2025.  a steady and continuous demand for maintenance and repairs, creating a lucrative opportunity for shops.
  • In 2018, just 10% of collision-damaged vehicles were scanned for error codes before and after repairs. In 2020, that number jumped to nearly 50%. The future is bright.
John Ellis CEO & Founder of The Automotive Advisor Team, LLC

Author: John Ellis

Founder & CEO The Automotive Advisor Team, Inc. BEVEveryting, Inc. Double E Consulting, Inc.

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