January a Mixed Bag So Far, CNW Reports
Floor traffic is up, as are deliveries, but CNW reports that sales in January are still off last year’s pace. But the numbers also show that April to May could be big months for dealers.
BANDON, Ore. — CNW Research described January as a mixed bag in its January newsletter. On one hand, it said, deliveries during the opening weeks of the month were nearly 13 percent higher than one year ago, but same-store sales were barely 6 percent.
CNW’s Art Spinella attributed any sales gains seen so far in January to grand openings at dealerships who recently completed facility upgrades.
“Dealerships tend to skew the sales numbers upward since grand opening sales are always well above the planning potential for a particular dealership,” Spinella wrote. “Add to this the fact that more than 18 percent of all dealership went through a remodel or location change in the final two months of 2012 compared to the usual 8 percent, and the January numbers could be well off the true 2013 trend line.”
Floor traffic was running nearly 11 percent ahead of last year, according to CNW, with closing ratios up about 5 percent. Combined, the two metrics should indicate a year-over-year sales gain of 6 to 8 percent vs. the year-ago period, Spinella wrote.
Spinella also noted that subprime approvals continued to smother year-ago numbers, with approvals showing a 41 percent improvement for the first half of January vs. the same month in 2012.
CNW’s Jitter Index, which tracks home-centric concerns, rose slightly, but Spinella noted that the slight uptick wasn’t enough to have a major impact on the desire for or willingness to buy a new vehicle. Spinella also offers some good news on the leasing front.
“Leasing continues to be a player in the market, offering lower monthly payments for those who are at the mid-FICO and above credit scores,” wrote Spinella. “The short-term contracts and low payments are gaining traction among dealers who are looking to boost their customer base.”
CNW also reported that the number of people who postponed a vehicle acquisition and say they plan to reenter the market soon has fallen to below 100,000. Reason for postponements included: uncertainty about the economy and concerns about job stability.
“That said, however, the length of the delay continues to shrink, down 11 percent vs. the same month last year,” Spinella explained. “If the numbers hold true, there could be as many as 85,000 additional sales in April to May than conventional marketing and trend line sales numbers would suggest.”
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