Philip Nothard, Insight and Strategy Director,
Cox Automotive.
It’s now been three months since I penned the foreword for our inaugural issue of AutoFocus, and to say a lot has happened since then would be an understatement. No sooner had showroom doors reopened in April then the reality of a global new car supply shortage set in.
Despite the market noise about semiconductor shortages, it was only when showroom doors reopened that the full reality hit home.
After so much time with their showroom doors closed, dealers were raring to hit the ground running but unfortunately, factors out of their control still hold them back to this day. Most new car models face shortages or lengthy lead times, placing added pressure on a used car market starved of supply.
Still, dealers are adapting remarkably well to finding new ways to source stock and keep profit turning in a market where wholesale prices have been rising faster than retail. We talk about how in our sections examining the new and used markets.
And while a lack of supply is causing problems, there are reasons to be optimistic. Retail demand has been extremely good since showrooms reopened and is showing no signs of slowing down. Once supply issues get resolved, we hope dealers can capitalise on this.
"Dealers are adapting remarkably well to finding new ways to source stock and keep profit turning in a market where wholesale prices have been rising faster than retail."
But when will new car supply issues get resolved? It’s difficult to say, but all signs now point towards Q1 of 2022. That means many more months of stock shortages and potentially rising prices. At some point, prices will stop rising, most likely when retail demand eases, which could very well come later in the year as the furlough scheme ends and the complete picture of the economic recovery is revealed.
As ever with AutoFocus, we aim to share relevant and timely insight on only the most important industry topics. We have reviewed the data to provide new and used car forecasts for Q3, as well as revised forecasts for 2021 as a whole. We also dive into the current factors impacting the new and used markets, particularly around supply issues, and how both markets are intrinsically linked.
I am happy to welcome NFDA and Grant Thornton to share once again their expertise on the franchised dealer and manufacturer landscapes, respectively.
And finally, we also revisit the discussion on the hot topic of the moment – electric vehicles – and, more specifically, what’s happening in the increasingly important used EV market.
It’s another packed issue that I hope answers questions you may have and brings some clarity to an often-confusing market.
We’d like to pay tribute to our much-loved friend and colleague, James Davis, who sadly passed away on 11th July.
James was well known for his expertise on the commercial vehicle market and his insights and passionate opinions were highly sought after. His contribution to this issue of AutoFocus is dedicated to his memory.
Thank you, JD.
You will be sorely missed.
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