Monday marked the first business day — or perhaps the third sales day depending on your dealership’s hours of operation — of the second quarter, which most dealers view as strong for the market.
That’s the conclusion from survey results of the Cox Automotive Dealer Sentiment Index (CADSI), which also recapped the soft views principals and managers had about the first quarter.
Dealer sentiment went into Q2 at a level like the one Cox Automotive recorded to close 2022. At 43, the index reading happened to be also at the lowest level since the height of the global COVID-19 pandemic.
With the Q1 index 50, it indicated more dealers viewed the auto market as weak. The Q1 index remained stable quarter-over-quarter but down 14 points year-over-year.
But perhaps the future is bright.
Cox Automotive indicated the three-month, forward-looking market outlook index rose sharply to 52, up from 41 in Q4. In spite of factors holding back their business, analysts pointed out that the increase breaks a trend of three consecutive quarters with a declining market outlook.
However, even with the improvement, Cox Automotive acknowledged the market outlook remains below last year’s Q1 score of 64, when dealers were entering 2022 with a stronger sense of optimism.
“Despite high interest rates and stubborn inflation, the U.S. consumer continues to prop up the economy,” Cox Automotive chief economist Jonathan Smoke said in a news release. “Auto sales are slow by historical standards, but the sales pace has been improving in early 2023, giving dealers reason to feel somewhat optimistic about the year ahead.”