Despite having some of the highest inventory levels in new cars in two years, a majority of U.S. car dealers expect the auto market to weaken in the next three months, according to a new quarterly survey by Cox Automotive.
In fact, with weak new car sales across the industry last month and automaker incentives higher by 50% from a year ago — the highest level since spring 2021 — Cox spokesman Mark Schirmer said in an email, “The signs of a sputtering market are front and center.”
Still, some dealers in metro Detroit contacted by the Free Press said they had a strong August and remain optimistic for the remainder of the year.
One of the main culprits in the pessimistic outlook, according to the dealer survey, is the uncertain political climate. The survey, released last week, showed 49% of franchised car dealers questioned blamed the current political environment for holding back business.
“The retail auto business today is working through a lot of uncertainty, with the coming national election front and center, and also expectations of shifting market dynamics,” Jonathan Smoke, chief economist at Cox Automotive, said in a statement. “U.S. dealers are feeling the effects of these dynamics in the market today and their expectations for the future.”