So you're having a hard time figuring out where the auto market is headed. You're not alone. The trends are all over the map.
Unemployment remains high. The stock market has been soaring. Consumer confidence is plunging. Consumer spending is up.
U.S. auto sales have dropped sharply for six straight months. But the seasonally adjusted annual sales rate continues to rebound, and average transaction prices are approaching $40,000.
Four months ago, the optimism of auto dealers, as measured by Cox Automotive's quarterly Dealer Sentiment Index, was recorded at an all-time low. In the latest survey, the outlook is much brighter. But don't do any cartwheels just yet. Cox Chief Economist Jonathan Smoke sees a darker outlook for the next quarter, particularly if finding enough new and used vehicles to sell remains a big issue.
The survey data tell part of the story. The voices behind the figures provide some rich context. About 13 percent of the 1,112 franchised and independent used-car dealers who completed the survey in the two weeks through Aug. 11 left relevant additional comments.
And one word stands out among those verbatim responses: COVID. Some dealers cast the pandemic as a boost for business. They're selling cars to people who have become wary of ride-sharing and public transit. Federal stimulus dollars have been a big help.
Others see COVID-19 cases leveling off in their area and normalcy on the horizon.
Still others frame it as an overblown nuisance. "This mask-wearing balogna is affecting our traffic," wrote a Fiat Chrysler dealer in the Midwest. There are mentions of "COVID-19 nonsense" and a "media-created crisis."
But for the majority of those who cite it, the virus is a big cause for ongoing concern. "The second surge of COVID-19 is pretty bad here," said an independent dealer. "People are running out of resources."
"I believe there will be a further spike in COVID cases once children are back in school, which may lead to further shutdowns and economic uncertainty," said a Subaru dealer in the Northeast.
Added another independent dealer, in a Southern state: "I believe the COVID situation will get much worse before it gets better."
They note concerns about cases rising on college campuses. They point to job insecurity, job loss and stimulus funds running out. For those consumers who are able to buy, dealers are struggling to find enough inventory as the industry churns to refill pipelines after spring's two-month plant shutdowns.
Yes, there are other worries. Social unrest is one. The election gets a lot of mention, too. But there's not much "political" in the comments beyond a gnawing sense of uncertainty—never a good thing—that will hang over the U.S. until Nov. 3.
As July turned to August, when the latest survey was being taken, about 1,100 Americans were dying daily from the virus, according to figures from the Centers for Disease Control and Prevention. The daily toll was less in recent weeks, an encouraging sign.
But if there's anything to experts' forecasts of a fall spike in cases and no immediate prospects for a vaccine, chances are the coronavirus will be weighing just as heavily on dealers' minds when the next quarterly survey wraps up in November as it did this last time around.