Asked what factors harmed their business, 61 percent of dealerships cited interest rates, up one point from the first quarter of 2023 and 45 points from the first quarter of 2022, when inventory was dealerships’ No. 1 concern.
“We’re actually seeing franchises become more negative about interest rates,” Smoke said.
The economy was the No. 2 most common hindrance, shared by 49 percent of franchise dealers, compared with 50 percent in the first quarter and 38 percent in the second quarter of 2022. A lack of inventory remained the No. 3 factor, a problem for 42 percent of dealerships during the second quarter — the same as a quarter earlier but down from 67 percent in the second quarters of both 2022 and 2021.
“The market conditions currently do not benefit the consumer,” a Nissan dealer in the South told Cox. “Between interest rates and the lack of credit availability, people just do not have the ability to purchase and afford a vehicle.”
Dealers scored new-vehicle inventory as a strong 60 on the Cox index, down from 63 in the first quarter but above any other time since the COVID-19 pandemic really started to affect the U.S. in the second quarter of 2020. That figure also was above some of the quarters before then as well. Sentiment about new-vehicle inventory mix also improved from a score of 50 in the first quarter of 2023 to 53 in the second quarter.
