Lament the state of the global economy, the U.S. unemployment rate, or the dismal fiscal discipline of many nations within the EU, but the U.S. automotive market remains strong, and that bodes well for auto finance.
Yesterday’s Beige Book on regional economic trends from the Federal Reserve delivered a positive anecdotal report from the automotive and auto finance market. The salient points from the report:
Most Districts reporting on auto sales noted increases in activity, despite lingering supply disruptions for some Japanese nameplates. The Kansas City and Cleveland Districts reported especially strong sales of fuel-efficient cars, while luxury vehicles sold well in the Minneapolis District. High demand for used cars was reported in several Districts. The New York and Philadelphia Districts reported somewhat softer auto sales in July, attributed in part to continued supply disruptions, although sales firmed somewhat in August. Tight vehicle supplies were noted in some Districts, and the San Francisco District noted ongoing shortages of Japanese nameplates. Auto contacts in the Dallas District believed the supply issues from Japanese manufacturers should be resolved by the end of September. Auto dealers in several Districts were optimistic about future sales, although contacts in the Philadelphia District said uncertainty clouded the outlook. The Cleveland District noted some easing in auto credit restrictions, and New York said both retail and wholesale auto credit conditions were good.
This report on the broader auto market shined compared with the overall Beige Book economic report, which cited “some Districts noted mixed or weakening activity.”
