Auto Dealer Valuation Insights

A weekly update on issues important to the Auto Dealer industry

SAAR Special Topics

2024 Automotive Trends

A Look Back to Look Forward

In 2024, the automotive industry is expected to experience changes in vehicle supply, incentives, transaction prices, and overall profits. The new vehicle market is adjusting to higher inventory levels and manufacturer incentives, but this increase in supply is not predicted to result in higher profit margins for dealers, mainly due to factors like increased interest rates, investments in electric vehicle infrastructure, and wage increases following the UAW strike. Additionally, trends in the car-buying process indicate a shift towards online and omnichannel purchasing methods, with a significant generational difference in vehicle ownership preferences between Millennials and Gen Z.

SAAR

December 2023 SAAR

In December 2023, the SAAR for vehicle sales reached 15.8 million units, a notable increase of 3.2% from the previous month and 16.8% from the same period last year, marking a return to double-digit year-over-year growth. Unadjusted total vehicle sales for December were the highest since 2020, with 1.43 million units sold, contributing to a total of 15.5 million units for the year, exceeding sales from the previous two years. Looking ahead, 2024 is expected to see continued growth in vehicle sales due to improved inventory, potential interest rate cuts, and increased affordability.

Special Topics

What Is the Car Parc Makeup?

The Automotive Market Trends report for Q3 2023 reveals key insights into the automotive industry. The report indicates that the light vehicle segment experienced a slight increase and the average age of vehicles on the road is rising, now at 12.5 years, reflecting longer vehicle retention by drivers. The report also highlights the popularity of SUVs and pickup trucks in the U.S., despite their higher costs and less favorable gas mileage compared to sedans.

Special Topics

‘Twas the Blog Before Christmas…

2023 Mercer Capital Auto Dealer Holiday Poem

It has become a tradition for the Auto Dealer team at Mercer Capital to end the blog year with a “unique” summary of industry events, riffing off Clement Clark Moore’s classic “A Visit from St. Nicholas.” We hope all of you enjoy the holiday season. We look forward to hearing from you in 2024.

Special Topics

Auto Dealer Insights: Best of 2023

As we put a bow on 2023, we’re looking back at our top posts from the year. Our weekly posts follow the auto industry closely to keep up with market trends and gain insight into the private dealership market.  We hope you have enjoyed our content in 2023, and we look forward to connecting further in 2024! 

SAAR

November 2023 SAAR

In November 2023, the SAAR for the auto industry showed year-over-year growth, maintaining a 16-month trend of improvements. Despite a general slowdown in growth, the industry’s unadjusted sales reached their highest level for November since 2019, with expectations of a further increase in December. A rise in vehicle inventory and Days’ Supply suggests a recovering market with potential challenges and opportunities ahead.

Special Topics

Return to Status Quo or a New Normal?

Auto Leasing Trend Update

In the evolving landscape of vehicle transactions, consumers have veered away from leasing due to factors like inventory shortages, higher interest rates, and less attractive leasing incentives. Despite this shift, leasing remains a cheaper option than buying, with dealers and manufacturers closely monitoring the market’s changing dynamics. As leasing shows signs of recovery in 2023, its future in the auto industry hinges on factors like market trends, consumer behavior, and effective dealership strategies.

SAAR

October 2023 SAAR

The October 2023 SAAR data indicates a nuanced picture of the auto industry, showing a slight decline from the previous month but a notable increase compared to last year, with sales reaching the highest October level since 2020. While the seven-month streak of double-digit year-over-year SAAR improvements has ended, the overall trend remains positive with a steady recovery in the industry inventory-to-sales ratio and an increasing Days’ Supply. This detailed analysis, including insights on inventory levels, transaction prices, and future outlooks, provides a comprehensive understanding of the current state and projections for the auto industry.

Auto Dealerships

Mercer Capital provides business valuation and financial advisory services to companies throughout the nation in the auto dealer industry.