Car Dealership Guy Podcast #103 CDG Market Update: Are inventory levels back to the “new-normal”, Record levels of negative equity, VW drops a $5 Billion bombshell | Jessica Caldwell, Head of Insights at Edmunds
Jul 23, 2024
Jessica Caldwell, Head of Insights at Edmunds, discusses market inventory levels, negative equity records, VW's $5 billion investment in Rivian, and the impact of CDK hack. Topics include APRs, record high borrowers with $1,000+ payments, and the challenges of negative equity in the automotive industry.
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Q2 Sales Flat, New Normal Emerging
- Q2 2024 auto sales remained flat year-over-year, not spiking as expected despite inventory increases.
- This suggests the market may have found a "new normal" volume sustaining profitability for automakers and dealers.
CDK Hack Disrupted, Dealers Adapted
- The CDK systems hack disrupted dealership sales and service operations extensively but dealers adapted with manual processes.
- While sales impacts were mitigated, service department struggles lingered due to complexity and capacity constraints.
Inventory Nears Healthy New Normal
- Inventory is improving to nearly pre-COVID levels (about 3 million units) but the pre-COVID levels were considered too high.
- Current inventory seems healthier and aligned with current demand and high interest rates, forming a sustainable "new normal."