Car dealers are known as optimists even when the going gets tough, but franchised dealers who sell both new and used vehicles appear more positive about the future than do their counterpart independent operators who sell only used cars.

 

That’s according to Cox Automotive’s latest dealer sentiment survey. It shows marked differences between the two groups when they were asked how the automotive market will look this summer after taking a hit in the spring from the COVID-19 pandemic. Many state stay-at-home orders closed dealerships (or limited their operations), hurting vehicle sales.
 
As to how franchised and independent dealers feel about impending business prospects, "there’s a pronounced divergence," said Jonathan Smoke, chief economist for Cox Automotive.
 
"More franchised dealers than not expect the market to be strong potentially through August," he said. "Independents expect it to be weak." In strong-weak index metrics, franchised dealers were at 57 points, independents at 40. "Independent dealers see the market as far weaker than do franchised dealers," Smoke said. "There’s a definite split."
 
That contrast extends to other survey questions posed to the two sets of dealers.
 
In describing their used-car sales, the index numbers were 43 for franchised dealers and 20 for independents. (The index was 39 for franchise dealers describing their new-vehicle sales.)
 
As to their view of the current market, franchised dealers were at 30, independents at 17.
 
Smoke quipped that franchised dealers’ relatively upbeat sentiment "gives me hope for the months ahead." He forecasts that both franchised and used-car dealers will move into "positive territory" before long as sales improve.