The market has been chaotic since the pandemic started. This week, we break down some of the indicators to see where it might be going.
Welcome back to another Wednesday Workshop from DealerOn. We hope this video finds you well.
With the pandemic still effecting markets in unpredictable ways, it’s never a bad idea to check in and see what exactly is going on.
Let’s start with the obvious. Sales are down overall. Comparing September 2020 with the same time the previous year, light vehicle sales are down 19%. Bad, but hardly apocalyptic. Don’t be fooled by the raw volume of sales, which are up 6.1%, as this is due to the inclusion of Labor Day and thus two more sales days.
Some of the news is good. Compared with this time last year, sales are down, but they’re up from the beginning of the pandemic. So there has been improvement.
For the first time since February, total sales are over 16 million. It’s too early to tell if this is a long term rebound or a momentary blip.
While most light vehicle sales have been down, larger categories have seen increases. Pickups, SUVs, and crossovers have all posted increases. In addition, 75% of all vehicles sold have been light trucks. This isn’t shocking for anyone familiar with the pickup’s dominance in the market, but it is food for thought when looking at the future of your inventory.
Another potentially important figure is incentive spending, which is below $4000 per vehicle for the first time this year. $3964 per vehicle, to be precise. That’s down $250 from the previous month – which is hardly earthshaking, but it does point to a rise in demand.
In addition, transaction prices are expected to be up 5.6% in September, and J.D. Power says they’ll go even higher.
So the news isn’t all gloom and doom. We have a few indicators that we might be coming out of the woods soon. And certain markets we’ve touched on—like light trucks—and some we haven’t—the pre-owned market—are doing quite well.
That’s all the time we have for today’s workshop. As always, if you have any questions or comments, leave them below and we’ll get back to you as soon as we can. Thanks for watching. We’ll see you next week for another Wednesday Workshop from DealerOn.