Car Dealers Fear Election Uncertainty

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Automotive Editor

Based out of the Washington, D.C. area, Joel Patel is an automotive journalist that hails from Northern Virginia. His work has been featured on various automotive outlets, including Autoweek, Digital Trends, and Autoblog. When not writing about cars, Joel enjoys trying new foods, wrenching on his car, and watching horror movies. 

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, Automotive Editor - June 12, 2024
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The automotive industry appears to be in uncertain times. The majority of automakers are pursuing electrified vehicles as a way to meet tightening emissions regulations, while others continue to take a more relaxed approach. It seems like automakers are waiting to see how the upcoming election turns out before diving headfirst into EVs. The uncertainty of the upcoming election also affects dealerships.

In a recent survey of dealer sentiment, Cox Automotive found that automotive dealerships across the country are facing uncertainty due to a “weaker-than-normal tax refund season and ongoing political and economic uncertainty.” According to Cox Automotive Chief Economist, Jonathan Smoke, the uncertainty in the market is leaving dealers “unsure of the road ahead” and the upcoming election, in addition to uncertainty regarding interest rates, is negatively impacting sales and consumer sentiment. Together, these qualities are forcing dealers to have a cautious outlook on the future.

Cox Automotive’s survey asked dealers about factors that are holding their business back and they pointed toward interest rates, the economy, and market conditions. “Political Climate continues to increase as a factor impacting business” as the U.S. presidential election date approaches, claims the organization. In the latest survey, 36% of dealers stated that the Political Climate was a factor that was holding their business back, which was up from 33% in Q1 and 29% from last year. Interestingly, franchised dealers cited Political Climate as holding back business more than independent dealers at 41%.

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“Many dealers and consumers believe the election outcome will impact the economy and the auto market in some way – either good or bad – and that expectation of change is causing paralysis in the market and hurting sentiment,” said Smoke.

According to the organization’s survey, the top five factors that dealers believe are holding their business back include interest rates, the economy market conditionings, the political climate, and expenses.

When taking a deeper look into Cox Automotive’s Dealer Sentiment Index report, one thing that the survey found is that sentiment regarding electric vehicle sales fell to a new low in the second quarter of 2024. The organization states that dealers believe the EV market is in decline and will shrink within the next three months.

Under President Biden, the push for automakers to continue developing and coming out with electric vehicles will certainly continue and possibly even hasten. This means dealers will be on the hook to sell more EVs, which aren't doing very well in the U.S. If Donald Trump were to win, we’re sure a rollback of emissions would arrive and dealers wouldn’t be forced to sell as many EVs, which would certainly make them happier. We'll have to see how things play out, but dealers aren't excited about the future.

Pictured: 2024 Kia EV9 (Top), 2024 Subaru Solterra (Middle)

Source: Cox Automotive

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, Automotive Editor

Based out of the Washington, D.C. area, Joel Patel is an automotive journalist that hails from Northern Virginia. His work has been featured on various automotive outlets, including Autoweek, Digital Trends, and Autoblog. When not writing about cars, Joel enjoys trying new foods, wrenching on his car, and watching horror movies. 

Follow On: Twitter

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