Auto Dealers Feel the Squeeze

After minting money during much of the pandemic, car sellers are in a tough spot: Between still-high vehicle prices and high interest rates, consumers are struggling to afford new cars. Yet auto makers aren’t offering enough incentives to move vehicles off the lots, either.

AutoNation said on Thursday that on a same-store basis, it sold 2.8% fewer new vehicles and 17.5% fewer used cars in the first quarter compared with a year earlier. Lithia Motors on Wednesday said it sold 6.3% fewer new vehicles and 2.4% fewer used vehicles over the same period. Cars are sitting on lots for longer as a result: Lithia said there were about 52 days of supply of new vehicles in the first quarter, up from 47 days a quarter earlier. AutoNation is carrying 25 days’ worth of new vehicle supply, up from 19 days from the prior quarter.