Used Cars Down, Carvana Down, Colors That Pick You Up

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It’s time for a Friday as we cover the Q3 earnings reports from the major auto retailers from across the country, as well as Carvana’s drop and their strategy to turn it around. We also get into the psychology of color and how to deploy it to your advantage. 

• Third quarter results reveal that all 6 top public auto groups are seeing significant declines in used car gross profits from 11 - 31% as volume also drops for some
  • AutoNation Inc., Lithia Motors Inc., Penske Automotive Group Inc., Group 1 Automotive Inc., Asbury Automotive Group Inc. and Sonic Automotive Inc. 
  • Gross profit per vehicle ranged from $1,588 to $2,478 for the quarter 
  • Penske’s CarShop and Sonic’s EchoPark stand alone used car stores have also been brake-tapped as both companies announce they won’t be opening any more stores this year due to the slowdown
  • A combination of higher acquisition costs and softening demand
  • Stephens analyst Daniel Imbro told Automotive News; While there is demand for used vehicles at a price point of $15,000 or less, Imbro said, there aren't many vehicles available in that range…But I think the used market will be a weaker profit stream relative to the new-vehicle side
• In yesterday’s earnings report Carvana reported a $508M net loss which is larger than the $506M loss from Q1 and more than 7x the $68m loss it reported a year ago as interest rates and inventory costs continue to rise
  • CEO Ernie Garcia and CFO Mark Jenkins, wrote in a letter to shareholders.“The environment has continued to get increasingly difficult since the end of the quarter and it is probable things will continue to get more difficult before they get easier,” as the company shifts its strategy from focusing on growth to focus on profit.
  • On a call w/ analysts Garcia also noted: “Cars are extremely expensive, and they’re extremely sensitive to interest rates.” He added he was hopeful rates might be close to peaking. “Interest rates have moved up materially, and most customers use financing to buy a car.”
  • Profit per vehicle retailed dropped to $3,500 down $1,172 from $4,672 in Q3 2021
  • There will be no outlook for 2023 provided
• The colors you choose can make a distinct difference in the emotions you trigger in guests and buyers. This new infographic from Luxury SoCal Realty intends to help you be more likely to  sell your house faster, curb child aggression, and even wake up happy
  • Color can help you increase or decrease appetite, Enhance mood, increase memory, boost attention spans, calm down customers, reduce perceptions of wait time, encourage sales or conversations
  • Red increases pulse, orange stimulates circulation, yellow increases metabolism, 
    • 60% of people who sleep in blue rooms wake up happy
    • 75% prefer purple over other colors
    • White paint reflects 98% make rooms look bigger
    • Pink reduces aggre

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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