Franchise Dealers: Outlook Positive

By Staff Writer March 11, 2020

According to the recently released Q1 2020 Cox Automotive Dealer Sentiment Index, U.S. automobile dealers’ view of the current automotive market remains negative and is mostly unchanged from Q4 2019. With an index score of 49, the rating was slightly more positive than last quarter, but the increase from Q4’s index score of 47 was not statistically significant. Year over year, the current market index was up by only one point, which was not statistically significant and remained below 50, indicating more dealers view conditions as weak rather than strong.

The quarterly survey by Cox Automotive was measured in late January and early February, during the Senate impeachment trial of President Trump and before the spreading economic worries – and stock market volatility – fueled by concerns over COVID-19.

As the CADSI has consistently demonstrated, the current market sentiment skews more positive for franchised dealers compared to independent dealers, who sell only used vehicles. The gap expanded this quarter after narrowing in Q4, with franchised dealers becoming more positive about current market conditions – increasing from 51 in Q4 to 55 in Q1 – while independents remained negative at 47, up only one point from Q4.

“The start of 2020 seems to have favored franchised dealers over independents,” said Cox Automotive Chief Economist Jonathan Smoke. “All dealers are optimistic about the spring, but the strong start of the year has made franchised dealers the most optimistic we have seen since the beginning of 2018.”

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Last modified on Friday, 13 March 2020 14:05

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