Nearly every auto dealership is facing significant inventory issues making it difficult to offer customers the variety and options previously available. Many domestic automakers such as Ford have been forced to shut down or slow the production of new vehicles. The lack of microchips and the limited availability of parts needed for assembly have dealt a devastating blow to the auto industry. Many dealers’ lots are virtually empty featuring only a few new vehicles where in years past there would be 100 or more. The lack of new car inventory has forced franchise dealers to shift attention to used cars.
The change of focus has created new challenges for independent auto dealers especially when it comes to inventory acquisition. As franchised dealers search for used car inventory, it makes it more difficult for independent dealers to keep lots full. According to the Cox Automotive Dealership Sentiment Index, 4th Quarter, inventory acquisition is the biggest challenge facing dealers. In fact, it was found that 62% of respondents indicated inventory management as a key factor holding businesses back. At the same time, profitability continues to climb to record highs. To help clients, prospects, and others, understand current market conditions, Wilson Lewis has provided a summary of key report findings below.
Data for the report was gathered via a quarterly online survey conducted from October 25th to November 8th. It includes responses from over 590 independent auto dealers located across the nation. Dealer responses were weighted by sales volume to be representative of the national dealer population. It is important to note that data is used to calculate an index (from 0 to 100) where a score of 50 or greater means more dealers view conditions as strong or positive and lower scores reflect the opposite sentiment.
It appears that inventory concerns are continuing to create issues for Atlanta area independent auto dealers. While profits are inching higher many are struggling to find the cars needed to keep the lot full of different options. If you have questions about the information outlined above or need assistance with tax or accounting issue, Wilson Lewis can help. For additional information call us at 770-476-1004 or click here to contact us. We look forward to speaking with you soon.
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