Fixed Ops Economic Outlook: Source

  • In 2024 the real GDP growth and the pace of job gains are expected to remain positive, and inflation is expected to decline to around 2.5% further evidencing the speculation of a soft landing.
  • The unemployment rate could tick up to 4.2% or so from its current 3.7% level.
  • Productivity has picked up recently, reaching the 4.7% level in the third quarter and advancing consistently over the past six months.
  • Considering these continuing trends, the Fed said it’s most likely done hiking rates and is penciling in three rate cuts in 2024.

 

Wholesale Outlook: Source

  • Cars are a need, not a want. Affordability as an issue for most consumers has built up a lot of pent-up “need” demand for a new more reliable car.
  • We see used cars growing and new cars not growing, as confirmed by Cox’s forecast of flat or down 2% for new cars in 2024.
  • 2024 will be a year of margin control and volume forecasting. Getting cars through recon faster and with less expense will grow both the used and the fixed departments, helping to combat margin compression.

 

Fixed Ops: Source

  • Consumer spending in the auto care industry is set to pass $400 billion in the next two years.
  • The average owner had their vehicle in for service or maintenance 2.5x a year in 2023, up from 2.3x a year in 2021.
  • Cars are lasting longer and longer which means more and more trips to the service lane…this is worth digging deeper on.
  • Perceived cost is a big reason we won’t own the service market as a dealer but the average dealership service visit in 2023 cost $258 compared to a very similar $249 at a non-dealer service provider.

 

 

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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