It's that time of year again. You know, where each of us get to speculate about what the new year has in store for retail auto dealers. I've observed many contrasting opinions, and so I decided to take the question to my social profiles.
In this blog, I'm going to share the predictions of automotive professionals from across the industry.
My question was simple. "What's your automotive industry prediction for 2024." As you can imagine, many showed up to share their answer and I'm glad they did. Each comment contains unique perspective about whether or not 2024 will be a 'doom-and-gloom' scenario or if it will be the greatest setup for wealth creation this generation has ever known.
Dwayne Mullings: Major bounce back for new automobiles.
Justin Wagner: Going to be strong. I'm already getting pre-sales for next year. Dealerships want major marketing and increase in profit on items to sell.
Trent Cannon: 16.5 million units sold, strong profit, mid/large groups will comprise 70%+ of the industry.
Mike Dorāzio: Delinquincy levels begin to decrease. Fed helps with interest rate reduction. Lender appetite comes back. OEM introduces more incentives to help rising day supply. Consumer confidence grows due to lower fuel costs, lower rates, tax money...etc. All in all - the instanity of the last few years is replaced with a more predictable market. I am obviously an optimist.
James Paye: I expect it to be the same as the last 5 years. Record breaking.
John W. Ruswick: I don't see a massive rate drop in '24 unless we are in a recession. If that happens there will be other challenges to face. My feeling is maybe a .75 drop over time in 2024.
Jasen Rice: Used cars continue to drop in value and new car incentives hit a record high.
Jasen's comment triggered a healthy thread worth noting.
Adam Arens: Shortage of used, a little heavy inventory on new, market demand driven by payments. Service and Parts continue to grow. Leasing / APR will be manufacturer incentive push. 1 store visit if that for many purchasers (online and 1 stop will be a large piece of the business).
I've been tracking M&A behavior for quite some time, intrigued by the level of activity in 2023. I believe that small groups will continue to bolster their profits by acquiring smaller single point stores. They will do this to provide an appealing offer for mid-sized groups, who are also looking to bolster themselves and look pretty for the large groups.
Asbury's recent acquisition of both Jim Koons Automotive Companies and Larry H. Miller Dealerships represents a trend that will continue into 2024 with the new year presenting fertile opportunities for large groups to acquire the mid-size and small dealerships.