Most automakers said the agency model likely won’t make U.S. inroads in the next five years. - Pexels/Erik McIean

Most automakers said the agency model likely won’t make U.S. inroads in the next five years.

Pexels/Erik McIean

Automakers have a largely positive outlook on the industry in the next 12 months, according to a just-completed survey of more than 110 brands.

The annual Kerrigan Advisors OEM poll found most automakers see retail profit normalizing and, not surprisingly, a more gradual electric-vehicle ramp-up to realistically match consumer demand. A significant number also expect sales to increase.

Most survey respondents, 54%, anticipate decreased dealership profits over the next 12 months, compared to 69% in last year’s poll. Those expecting flat profits increased from 24% to 41%.

A minority of brands, or 38%, see new-vehicle gross margins returning to levels experienced before the pandemic. Conversely, 62% expect them to settle at 50% to more than 150% past 2019 levels.

While nearly half, 48%, project that sales will be flat, 44% see them on the rise, and a mere 8% expect a sales slump, all despite affordability pressures on consumers. That’s at least in part because automakers expect inventories to continue their upswing, 70% of them anticipating days’ supply normalizing at 60 to 90 days, up sharply from 38% last year.

In good news for auto dealers, Kerrigan says automakers’ slower-than-expected EV sales have changed their views on the agency sales model. A majority, or 57%, said the agency model likely won’t make U.S. inroads in the next five years, compared to 34% last year. A smaller share, 18%, said they anticipate more facility requirements for dealers, down from 32% last year.

As for the customer relationship and data, the survey found most brands expect that OEMs and dealers will share it in the next five years, while 19% think the automakers will assume that exclusively, up by 16%.

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