Dealer optimism was at a record high during the spring according to Cox Automotive Chief Economist who went on to say that while dealers remain optimistic for the coming months, the new-vehicle inventory situation is not improving, and sales are suffering as a result.
A poll revealed that limited inventory remains at the top of the list of factors dealers say are holding back their business. It first ranked at the top of thee list in the third quarter of 2020 and the percentage of dealers expressing concerns has climbed ever since, from 59 percent to 73 percent in 2021.
Several dealerships stated that the inventory crunch has taken a toll. One dealership even stated that their stock levels had fallen to fewer than 50 vehicles from their typical number of 300-plus. Certain models have had zero production for almost six months, leading to a complete absence of certain vehicles.
The Cox survey records responses from dealerships and identifies the key factors affecting their optimism or pessimism for the coming months. 1,110 dealers were included in the survey. Overall, sentiment about the vehicle market was slightly lower than last year, but still indicating a strong optimistic view.
Franchised dealerships held a negative view of the used-vehicle inventory levels, though it had also improved over the previous quarter. Demand continue to rise, providing optimistic outlooks for dealerships.
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