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The auto industry is facing sales challenges, with companies like Stellantis (STLA) cutting their full-year guidance. CarGurus Director of Industry Insights and Analytics Kevin Roberts shares his outlook on the industry’s current state.
Roberts highlights contrasting trends in the global auto market. In China, there’s a shift towards lower-priced vehicles from local manufacturers, impacting global automakers. Meanwhile, the US market is grappling with oversupply for many automakers, raising concerns about sales demand. These opposing situations in the world’s two largest auto markets are creating uncertainty in the industry.
Affordability remains a major issue, especially in the US. While the recent Fed rate cut is expected to bring some relief, Roberts cautions against expecting immediate changes. He explains, “While a 50 basis point cut from the Fed is welcome, I don’t think it’s going to have a large impact on vehicle prices immediately. We likely need to see more sustained cuts from the Fed in coming months and years to really reduce vehicle prices that could offset the significant price increases we’ve been seeing for new and used vehicles.”
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This post was written by Angel Smith