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Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
C O V I D - 1 9 E D I T I O N
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
C O V I D - 1 9 E D I T I O N
Background
Data for the Cox Automotive Dealer Sentiment Index
(CADSI) is gathered via a quarterly online survey of
franchised and independent auto dealers.
Dealer responses are weighted by dealership type
and volume of sales to closely reflect the national
dealer population. Data is used to calculate an index
wherein a number over 50 indicates more dealers
view conditions as strong or positive rather than weak
or negative.
The Q2 2020 CADSI is based on 1,140 U.S. auto
dealer respondents, comprising 610 franchised
dealers and 530 independents. The survey was
conducted from April 28, 2020 to May 10, 2020.
The next quarterly report will be released in Sept.
2020. The CADSI was first published in Q3 2017.
2Dealer Sentiment Index Q2 2020
Key TakeawaysQ2 2020 CADSI data was gathered in late
April and early May this year, when the
retail auto industry was reeling from the
negative impact of the COVID-19
pandemic. As expected, dealer sentiment
in every category dropped significantly.
“The COVID-19 pandemic dramatically
impacted the auto market and dealers
starting in March, so it is no surprise to
see views of sales, profits, and sentiment
significantly down in the second quarter
survey,” said Cox Automotive Chief
Economist Jonathan Smoke. “However,
what stands out to me is the optimism of
franchises about the next 90 days. The
majority of franchised dealers are
optimistic about the rest of the spring and
summer despite the weak economy, weak
current sales, and declining inventory.”
The overall current market index declined
substantially in Q2, plunging further into
negative territory with a score of 20, an
all-time low for the index.
3Dealer Sentiment Index Q2 2020
The index reading of 20 indicates the vast
majority of dealers feel that the current
market is weak compared to the number
who feel that the current market is strong.
Consistent with the severe decline, the
key drivers of sentiment saw drops as
well. The 3-month market outlook index
score of 45 shows that, despite some
optimism from franchised dealers, more
dealers see the market in the next 3
months as weak as opposed to strong.
Dealer sentiment of consumer traffic and
profits were particularly negative in Q2
2020, with index scores of 13 and 17,
respectively, among the lowest scores
ever recorded in the survey.
Consistent with the negative views of the
market, the views of both new- and used-
vehicle sales significantly decreased
overall in Q2 compared to last quarter and
last year. The new-vehicle sales index
plummeted to 39, indicating a poor
market. The used-vehicle sales index
faired worse, with an index score of 26.
Independent dealers were particularly
negative, with an index score of 20, while
franchised dealers, with an index score of
43, continue to be more positive about
used-vehicle sales versus new.
The top 5 factors holding back business
across all dealers significantly shifted in
Q2 from Q1, with Business Impacts from
COVID-19 making its debut in CADSI at
the top spot with 75% of dealers citing it.
The Economy moved up to 2 from 7 last
quarter with 60% of dealers citing it.
Market Conditions dropped from 2 to 3
from Q1 to Q2. Consumer Confidence
rose from 9 to 4, which was the factor’s
highest ever overall ranking. Limited
Inventory remained in the top 5 but
dropped from 4 to 5 in Q2 with only 26%
of dealers citing it.
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Strong
Weak
48
4546
4951 51
44
4849
48 4749
20
5455
5455
56
59
5150
5456
51
55
30
46
4243
47
5048
42
4748
46 4647
17
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Q1: How would you describe the current market for vehicles in the areas where you operate?
4
Note: Scale 1 - 100
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Strong
Weak
Q2: What do you expect the market for vehicles in your area to look like 3 months from now?
5
55
5253
70
5657
49
63
55
51 51
63
45
64
57 57
73
69
61
54
62 62
57
54
66
57
5251
52
70
52
55
47
63
52
49
51
61
40
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Note: Scale 1 - 100
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Strong
Weak
6
3837
3435
4041
3335
4240
3736
13
4342
4543
4446
41
38
4547
4345
20
36 36
3133
39 39
30
33
41
3735
32
11
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Note: Scale 1 - 100
Dealer Sentiment Index Q2 2020
Q3: How do you rate the customer traffic to your dealership over the past 3 months?
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Strong
Weak
Q4: How would you describe your profits over the past 3 months?
7
44
41 41 4143
42
38 38
4442
44
40
17
4850
49 4951
49 49
43
5152
51 51
25
43
38 38 38
4140
3536
42
38
42
36
14
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise IndependentNote: Scale 1 - 100
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Easy
Difficult
Q5: How would you describe your ability to get credit to operate your business over the past 3 months?
8
59
55
57
61
59 5960 60
6160 60
58
46
6766
68
70
65
67
6968
6766
65 65
5756
52
54
5857 57 57
5859 59
5857
43
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Note: Scale 1 - 100
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Growing
Declining
Q6: How would you describe the cost of running your dealership over the past 3 months?
9
6968
67 67
70
6768
69
6665 65
69
51
69 69 6968
70
67
6970
67 67
6566
48
70
6766 66
69
6768
69
6665 65
70
52
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Note: Scale 1 - 100
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Good
Poor
Q7: How would you describe the current new-vehicle sales environment?
10
57 57
61
65
59 60
57
53 54 55 56 57
39
57 57
61
65
59 60
57
53 54 55 56 57
39
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise
Note: Scale 1 - 100
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Q8: How would you describe the current new-vehicle inventory levels?
11
67
62
68
61
5759 60
64
6159
56
41
67
62
68
61
5759 60
64
6159
56
41
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise
Note: Scale 1 - 100
Growing
Declining
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Q9: How would you describe the current new-vehicle inventory mix?
12
Note: Scale 1 - 100
Good
Poor
Note: New question
introduced in Q2 2019
75
7273 73
64
75
7273 73
64
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Q10: How would you describe the current used-vehicle sales environment?
13
5557
55 56 5557
5153
56 5553 53
26
7068 67
6972 72
6866
72 73
66
72
43
5053
51 5250
52
4648
5149 49
47
20
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Note: Scale 1 - 100
Good
Poor
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Growing
Declining
Q11: How would you describe the current used-vehicle inventory levels?
14
5153
59
49 48 48
54
46 47
53 53
31
55 55
62
58
5254
62
53 54
58 59
43
50
53
58
45 46 46
52
44 44
51 51
27
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Note: Scale 1 - 100
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Q22: How would you describe the current used-vehicle inventory mix?
15
63 63 64 65
52
66 6567 66
57
62 6263 64
51
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Note: Scale 1 - 100
Good
Poor
Note: New question
introduced in Q2 2019
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
More
Less
Q13: How much pressure do you feel to lower your prices?
16
Note: Scale 1 - 100
Dealer Sentiment Index Q2 2020
6463
67
62
6463
67
6364
63 63 63
70
65
67 67
62
6665
67 6766
6564
66
69
6362
67
6263 63
66
6263
62 6263
70
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Growing
Declining
Q14: How would you describe your dealership's current staffing levels?
17
52 52 5254
5250 50
4850 49 50
52
35
56 55 55
60
5553 52 53 54 53 54
59
35
50 51 5152
5149 49
4749
4849 50
35
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Note: Scale 1 - 100
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Large
Small
Q15: How would you describe the current level of OEM new-vehicle incentives?
18
48 4947
51
48 4947
51
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise
Note: Scale 1 - 100
Note: New question
introduced in Q3 2019
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Strong
Weak
Q16: How would you describe the current U.S. economy?
19
55 5557
23
55 54
57
29
55 5557
21
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Note: Scale 1 - 100
Note: New question
introduced in Q3 2019
Dealer Sentiment Index Q2 2020
20
Factors Holding Back Your Business?
Significant decrease vs
previous quarter
Significant increase vs
previous quarter
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
OV
ER
AL
L R
AN
K
Q2 ’20 Q1 ’20 Q2 ’19
1 Business Impacts From COVID-19/Coronavirus 75% N/A N/A
2 Economy 60% 19% N/A
3 Market Conditions 49% 34% 40%
4 Consumer Confidence 42% 17% 13%
5 Limited Inventory 26% 29% 33%
6 Political Climate 22% 19% N/A
7 Credit Availability for Consumers 22% 30% 31%
8 Expenses 18% 21% 29%
9 Competition 12% 34% 35%
10 Regulations 12% 6% 7%
11 Credit Availability for Business 9% 7% 6%
12 Too Much Retail Inventory 6% 5% 7%
13 Consumer Transparency in Pricing 5% 9% 12%
14 Staff Turnover 5% 8% 12%
15 Weather 5% 19% N/A
16 Lack of Consumer Incentives From My OEM 3% 5% N/A
17 Technology to Support Sales 3% N/A N/A
18 Tariffs on Imported Vehicles and Parts 2% 3% 4%
19 Dealership Systems/Tools 2% 5% 5%
Dealer Sentiment Index Q2 2020
21
Factors Holding Back Your Business?
Significant decrease vs
previous quarter
Significant increase vs
previous quarter
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
OV
ER
AL
L R
AN
K
Q2 ’20 Q1 ’20 Q2 ’19
20 OEM Mandates/Restrictions 2% 3% 4%
21 OEM Priorities 2% N/A N/A
22 Interest Rates 2% 8% 16%
23 Technology to Support Operations 1% N/A N/A
Dealer Sentiment Index Q2 2020
22
Factors Holding Back Your Business?
Significant decrease vs
previous quarter
Significant increase vs
previous quarter
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Q2 ’20 Q1 ’20 Q2 ’19
1 Business Impacts From COVID-19/Coronavirus 72% N/A N/A
2 Economy 53% 20% N/A
3 Market Conditions 45% 34% 39%
4 Consumer Confidence 38% 18% 22%
5 Political Climate 23% 23% N/A
6 Limited Inventory 15% 18% 19%
7 Regulations 14% 2% 4%
8 Expenses 13% 17% 21%
9 Lack of Consumer Incentives From My OEM 12% 21% N/A
10 Competition 10% 32% 37%
11 Staff Turnover 9% 19% 25%
12 Credit Availability for Consumers 8% 18% 23%
13 OEM Mandates/Restrictions 8% 10% 17%
14 OEM Priorities 7% N/A N/A
15 Weather 6% 23% N/A
16 Too Much Retail Inventory 4% 4% 6%
17 Consumer Transparency in Pricing 3% 9% 12%
18 Credit Availability for Business 2% 2% 1%
19 Interest Rates 2% 11% 26%
FR
AN
CH
ISE
D D
EA
LE
RS
Dealer Sentiment Index Q2 2020
23
Factors Holding Back Your Business?
Significant decrease vs
previous quarter
Significant increase vs
previous quarter
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Q2 ’20 Q1 ’20 Q2 ’19
20 Tariffs on Imported Vehicles and Parts 2% 4% 6%
21 Technology to Support Sales 2% N/A N/A
22 Technology to Support Operations 1% N/A N/A
23 Dealership Systems/Tools 1% 8% 7%
FR
AN
CH
ISE
D D
EA
LE
RS
Dealer Sentiment Index Q2 2020
24
Factors Holding Back Your Business?
Significant decrease vs
previous quarter
Significant increase vs
previous quarter
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Q2 ’20 Q1 ’20 Q2 ’19
1 Business Impacts From COVID-19/Coronavirus 76% N/A N/A
2 Economy 62% 19% N/A
3 Market Conditions 50% 34% 40%
4 Consumer Confidence 43% 17% 11%
5 Limited Inventory 29% 33% 38%
6 Credit Availability for Consumers 27% 35% 33%
7 Political Climate 22% 18% N/A
8 Expenses 20% 22% 31%
9 Competition 13% 35% 34%
10 Regulations 11% 7% 8%
11 Credit Availability for Business 11% 8% 7%
12 Consumer Transparency in Pricing 6% 9% 13%
13 Too Much Retail Inventory 6% 6% 7%
14 Weather 5% 17% N/A
15 Staff Turnover 4% 4% 7%
16 Technology to Support Sales 3% N/A N/A
IND
EP
EN
DE
NT
DE
AL
ER
S
Dealer Sentiment Index Q2 2020
25
Factors Holding Back Your Business?
Significant decrease vs
previous quarter
Significant increase vs
previous quarter
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Q2 ’20 Q1 ’20 Q2 ’19
17 Tariffs on Imported Vehicles and Parts 3% 3% 4%
18 Dealership Systems/Tools 2% 4% 5%
19 Interest Rates 1% 7% 13%
20 Technology to Support Operations 1% N/A N/A
IND
EP
EN
DE
NT
DE
AL
ER
S
Dealer Sentiment Index Q2 2020
The Business Impact of COVID-19
Dealer Sentiment Index Q2 2020 26
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Strong
Weak
48
4546
4951 51
44
4849
48 4749
20
5455
5455
56
59
5150
5456
51
55
30
46
4243
47
5048
42
4748
46 4647
17
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Q1: How would you describe the current market for vehicles in the areas where you operate?
27
Note: Scale 1 - 100
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
Strong
Weak
Q2: What do you expect the market for vehicles in your area to look like 3 months from now?
28
55
5253
70
5657
49
63
55
51 51
63
45
64
57 57
73
69
61
54
62 62
57
54
66
57
5251
52
70
52
55
47
63
52
49
51
61
40
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Overall Franchise Independent
Note: Scale 1 - 100
Dealer Sentiment Index Q2 2020
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
29Dealer Sentiment Index Q2 2020
Top Priorities at This Time
OverallFranch.
(A)
Indep.
(B)
High
Tax
States
All
Other
States
Staying in business in general 46% 23% 54% A 49% 45%
Reducing expenses / cutting costs 15% 13% 16% 18% 14%
Improving Sales & Service solutions 11% 20% B 8% 12% 11%
Improving efficiency in general 11% 12% 10% 11% 11%
Retaining customers 8% 14% B 6% 5% 8%
Retaining employees 4% 9% B 3% 3% 4%
Gaining market share 3% 7% B 2% 1% 4%
Other 2% 2% 2% 1% 2%
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
30Dealer Sentiment Index Q2 2020
Regional View – Index Scores
Question AnswerNorth-
east
Mid-
westSouth West
Current Market Strong/Weak 23 31 33 32
Market Next 3 Months Strong/Weak 56 57 60 54
Customer Traffic Strong/Weak 11 19 26 21
Profits Strong/Weak 17 22 32 24
Dealer Credit Easy/Difficult 58 61 55 57
Costs Growing/Declining 46 47 53 44
New Vehicle Sales Good/Poor 27 38 47 42
Note: Scale 1 - 100
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
31Dealer Sentiment Index Q2 2020
Regional View – Index Scores
Question AnswerNorth-
east
Mid-
westSouth West
Used Vehicle Sales Good/Poor 31 45 51 37
Used Vehicle Inventory Growing/Declining 45 44 45 38
Current Mix of Used Inventory Good/Poor 52 56 60 57
Price Pressure More/Less 68 69 69 71
Staffing Growing/Declining 27 37 42 30
OEM incentives Large/Small 51 47 51 58
Economy Strong/Weak 22 29 34 30
Note: Scale 1 - 100
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
32Dealer Sentiment Index Q2 2020
State Sales Impact – Index Scores
Question AnswerSevere
(A)
Moderate
(B)
None
(C)
Current Market Strong/Weak 18 19 23A
Market Next 3 Months Strong/Weak 41 47 47A
Customer Traffic Strong/Weak 9 11 16AB
Profits Strong/Weak 14 18 19A
Dealer Credit Easy/Difficult 49C 48 43
Costs Growing/Declining 52 49 51
New Vehicle Sales Good/Poor 34 41 44A
Note: Scale 1 - 100
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
33Dealer Sentiment Index Q2 2020
State Sales Impact – Index Scores
Question AnswerSevere
(A)
Moderate
(B)
None
(C)
Used Vehicle Sales Good/Poor 20 26A 30A
Used Vehicle Inventory Growing/Declining 32 31 31
Current Mix of Used Inventory Good/Poor 55 53 50
Price Pressure More/Less 70 71 69
Staffing Growing/Declining 31 33 39AB
OEM incentives Large/Small 51 52 52
Economy Strong/Weak 20 24 25A
Note: Scale 1 - 100
34
Contact Information:
Dara Hailes
Manager, Public Relations
Cox Automotive
Mark Schirmer
Director, Public Relations
Cox Automotive
Dealer Sentiment IndexS E C O N D Q U A R T E R 2 0 2 0
34Dealer Sentiment Index Q2 2020