Regular updates on issues important to the Auto Dealer industry
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.
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.
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!
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.
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.
Last month, we attended the 2023 AICPA Dealership conference and in this post present key takeaways on two sessions that are of interest to our blog readers: “Driving Success in Auto Retail” and “The Electrification of Auto Retail.”
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.
Mercer Capital’s Scott Womack had the pleasure of being invited to record a series of videos created by the Rawls Group, where he talked with partner and succession advisor Dan Iosue. Get to know what both Dan and Scott do best as they talk about everything from the best timing for valuations to how to successfully negotiate business disputes in the auto industry.
Understanding the intricacies of business valuation, particularly for auto dealerships, involves a comprehensive examination of balance sheets, income statements, and normalization adjustments. We explore the significance of tangible and non-operating assets, the nuances of working capital, and the critical nature of management insights in assessing a dealership’s true value. A case study highlights the multifaceted approach required, underscoring the importance of expert analysis in navigating the complex terrain of financial assessments and valuations.
We are pleased to release our latest edition of Value Focus: Auto Dealer Industry Newsletter.
