A Snippet from “The State of the Union: Retail Automotive” at SAS 2024

The automotive industry is navigating a recovery phase following significant setbacks in recent years, including constrained inventory, rising interest rates, diminished brand loyalty, and prolonged consumer purchase cycles. Joe Kyriakoza, VP & General Manager, and Tom Libby, Associate Director of Loyalty and Industry Solutions from S&P Global Mobility analyze these trends to shed light on the industry’s current state.

Central to the recovery strategy is inventory production. Original Equipment Manufacturers (OEMs) are making promising strides, doubling dealership inventory since January 2022. As inventory levels rebound, so does brand loyalty. After falling to 48.8% in late 2022, brand loyalty has rebounded by over 5% as dealerships replenish their stock.

Tom underscores the critical link between inventory levels and brand loyalty, forecasting that ongoing inventory growth will restore brand loyalty to pre-COVID levels exceeding 54%. With a diverse selection of vehicles offered by their current brand, consumers are increasingly inclined to remain loyal, encouraging repeat purchases.

While effective marketing boosts awareness, diminished vehicle inventory will limit the store’s ability to sell and retain previous customers. As production ramps up, the industry expects broader stability and recovery.

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