With dealership profitability riding high, franchised dealers came into 2021 still strongly optimistic about the market at hand. But the effects of the coronavirus pandemic and inventory shortages are high on their list of concerns about factors that could put a crimp in results, according to the latest Cox Automotive Dealer Sentiment Index survey.
The first-quarter survey marked the third-straight quarter of strong optimism by franchised dealers after their outlook plunged in the second quarter of last year, during the peak of the industry's coronavirus crisis. Cox Automotive Chief Economist Jonathan Smoke said 2020 marked the "most dramatic year in history" for the index, which was launched in 2017. The roller coaster for dealer sentiment coincided with the most profitable year on record for U.S. dealerships, according to the National Automobile Dealers Association, which tracks the data.
"We've now had two quarters in a row of fairly normal seasonal patterns, even though nothing is normal still in the economy," Smoke told Automotive News.