Economic Update: Source
- At the beginning of the year, inflation was up almost 7% and is now moving in the right direction it is down by approximately 4%.
- 3% of small businesses consider inflation the number one hindrance to their growth and success so this is a good number moving into the last quarter of the year and the first part of 2024.
- However, wages and employment have kept the fed on alert as each month after April of this year wage growth has outpaced inflation by 2 to 3 % points.
- Labor markets are starting to soften but there are still plenty of job openings in the market today and outpace 2019. We see how difficult it is to find Techs no matter what we pay or the bonus.
Wholesale Market Trends: Source
- According to Black Book, two to six-year-old inventory valuations are steady while Manheim’s MMR is declining rapidly week over week.
- That suggests dealers can retail the older less expensive inventory easier.
- That also suggests more recon work and our ability to keep that labor and parts cost in line is critical to the overall dealership success.
Service Trends: Source
- From May through September, the amount spent on car repairs rose over 100% compared to the previous year.
- Due to the age of VIO, the requirement for car maintenance has increased by 62.3%.
- Around 14 million automobiles on the road today are at least 25 years old.
- Insights from the J.D. Power 2023 U.S. Auto Claims Satisfaction Study show repair cycle times now average 23.1 days, doubling within two years.
That data suggests there are plenty of cars that need repair, and we know 75% of that older inventory uses independent. A strategy to improve parts inventory, bay utilization, and tech utilization planning that reduces repair times can help attract lost customers and grow your department.