Auto dealer stocks on the rise

Thursday, August 13, 2020

Auto dealers across the United States are seeing an increase in value. Large auto groups are expanding. One auto group is Lithia Motors, who has seen a 243.46% increase in their stocks from March 18 to August 12, 2020. Another auto group that has seen an increase in its stock value is Sonic Automotive, which increased by 239.4%. CarMax also saw an increase of 97.62%. The used car market is increasing significantly as well. The used car market has always had a high-profit margin, double of what new vehicles would be. In the month of June, auto dealers had record-high earnings, which were up 85% for the average dealer as compared to 2019. With these large auto groups expanding and the used car market doing well, profitability is rising.

To learn more, check out CNBC’s video.

Action items for dealers:

  • With used cars sales going up, there are two choices:
    • Push the sale of used vehicles because of its increase in sales or
    • Advertise new vehicles; used vehicles are already selling more than new vehicles, so it may be time to encourage trade-ins to purchase a new car—this also increases your dealership’s used vehicle inventory because of the trade-ins