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Dealers’ Sentiment Flat in Q3

Cox index shows independents, though, have a bleak outlook.

September 8, 2023
Dealers’ Sentiment Flat in Q3

Franchised dealers' outlook and profits are well above those of independents.

IMAGE: Pexels/Torsten Dettlaff

1 min to read


U.S. auto dealers’ views on their business and the industry as a whole were flat in the third quarter, Cox Automotive’s Dealer Sentiment Index shows.

It said high interest rates and concerns about the overall economy kept dealers’ outlook from rising, despite robust sales.

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The current-market index came in at 45; Cox considers 50 to indicate most dealers’ consider the economy to be strong, and this was the fifth quarter in a row that that threshold wasn’t met. The index’s record high was 67 in the second quarter of 2021.

Cox said franchised dealers are more optimistic than their independent cohorts, measuring 57 on the index, up a point quarter-over-quarter, compared to 41 for independents, down one point.

Its three-month outlook index fell two points to 45, also with franchised dealers more optimistic than independents.

“Franchised dealer optimism is on the rise, whereas independents are less hopeful due to affordability issues that more acutely affect the used-vehicle market and their businesses,” said Cox Automotive Chief Economist Jonathan Smoke, who pointed out that the auto sector held steady from last quarter.

Overall profits, though well off pandemic highs now, are still elevated for franchised dealers but are near an all-time low for independents, whose profit index sits at 35, “well below long-term averages.”

Originally posted on Auto Dealer Today

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