How Dealers Use Data, A Mixed Recovery, Higher Prices = Higher Quality

The Automotive Troublemaker w/ Paul J Daly and Kyle Mountsier

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It’s a new week, and we’ll be on the ground in dealerships in New York and Indiana today. We’re talking about how dealers are using data to make decisions, what the second half of the year looks like for dealers, and how consumers are dealing with higher prices.

• Cox Auto's Power of Data Study was conducted in late 2023 and early 2024 and takes a close look at how U.S. auto dealers are using data to run their dealerships, make decisions, and boost customer value.
  • Nearly all dealers use Customer/Lead Data (96%), Vehicle Data (94%), and Dealership Data (96%). Over 80% of dealers see the upside of using data. They mention things like more accurate forecasting, better trend monitoring, higher revenue, and increased efficiency.
  • However, confidence levels vary. While 72% trust their in-house data, only 66% trust third-party data. Most OEM and third-party data runs on 30, 60, or 90-day trends, which isn’t always helpful for day-to-day decision-making.
  • Data privacy and compliance are major worries. About 66% of dealers are concerned about ensuring data privacy, and 44% have held off on adopting new tools because of these fears.
  • The top goals for using data are to increase revenue, improve customer experiences, and enhance internal operations. This includes everything from tracking employee performance to managing inventory more effectively.

• The automotive market is experiencing a mixed recovery as high interest rates and pricing concerns temper sales growth in the latter half of 2024.
  • U.S. light-vehicle sales in July were estimated at 1.3 million, down 0.4% year-over-year, with variations in estimates by GlobalData and Cox Automotive.
  • The seasonally adjusted annualized rate of sales rose to 16.1 million units, up from June's 15.3 million units.
  • Automakers reporting monthly sales showed mixed results: Mazda, Subaru, Hyundai, and Honda posted gains, while Toyota, Ford, Kia, and Volvo saw declines.
  • Fleet sales dropped 33% year-over-year, impacting overall sales.
  • Inventory levels rose by 49% compared to July 2023, but the growth is expected to slow in the second half of the year.
  • "July's performance was disappointing, suggesting that the market could be losing a little momentum as we head into the second half of the year," said David Oakley, head of automotive forecasting for the Americas at GlobalData.
• Consumers' cautious spending continues, benefiting dollar stores and off-price retailers. Shoppers are not just looking for low prices; they demand value and quality.
  • Many shoppers expect higher quality as prices rise, not just maintaining price points.
  • For example, retailers like Abercrombie & Fitc

Hosts: Paul J Daly and Kyle Mountsier
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