Alex Tovstanovsky, owner of used car dealer Prestige Motor Works, and Ryan Caton, general manager, inspect inventory on May 28, 2020, in Naperville, Illinois.
Nick Carey | Reuters
DETROIT — U.S. auto dealers are optimistic about the future, driven by President-elect Donald Trump’s return to the White House and positive trends in interest rates and automaker-backed sales incentives, Cox Automotive reported Wednesday. 2025 is filled with “new optimism.”
But Cox said dealers are no more optimistic about electric vehicle sales. “Dealer Confidence Index for the Fourth Quarter of 2024”,” the report is based on an extensive survey of dealers conducted after the U.S. presidential election in November.
“The outlook for electric vehicle sales has declined further in the coming months, with most dealers saying sales will fall next quarter,” Cox said. “There are concerns that the new government’s policies will not help the already fragile business.”
These potential policy changes under the Trump administration could include reducing federal funding to promote electric vehicles, such as ending a consumer credit that currently covers up to $7,500 to purchase a car, and easing strict fuel and emissions regulations.
“We’re getting clear feedback that the tax credit works in both new and secondary markets,” Cox Chief Economist Jonathan Smoak said in a release. “This situation could quickly change next year. changes, so I think the weakening outlook is directly related to the risk status of the EV tax credit.”
Car dealer inventories in 2024.
The Cox Market Outlook Index, which measures dealer expectations for the auto retail market in the coming quarter, jumped to 54 in the fourth quarter, up from 42 in the previous quarter. The higher the number, the more confidence the dealer has in his business.
Dealer responses are weighted by dealer type and sales volume to closely reflect the national dealer population. The data is used to calculate an index, where numbers above 50 indicate that more dealers view conditions as strong or positive rather than weak or negative.
“This significant increase suggests that more dealers believe the auto market will strengthen over the next three months. A year ago, the index was just 41, one of the lowest readings in its history,” Cox said in a statement stated in the press release.
Cox pointed out that despite the optimistic outlook, the current market index of 42 points shows that most dealers still believe that the current retail automobile market is weak. The score is slightly better than a year ago, but still well below pre-pandemic norms and long-term averages.
“The resolution of political uncertainty following the presidential election has cleared the way for a more optimistic outlook for future auto market conditions,” Smoak said. “Coupled with the potential for supportive measures such as tax rebates and lower interest rates, the outlook for the economy as we move into 2025 , dealers are more hopeful about the future.”
After the November election, 35% of dealers surveyed said the political climate in the United States was affecting their business, down significantly from 44% of dealers and 49% of franchise dealers in the previous quarter.
Shares of publicly traded auto dealers have performed well this year as pricing on new and used cars remains high. shares automated country, Lithia Automotive and sonic car It’s up 15% to 22% this year, while Group 1 cars The most outstanding performance will be approximately 40% by 2024.
About The Author
