Holiday season is here! Will consumers be spending? Recent PwC research says, “yes”. In fact, the PwC 2019 Holiday Outlook shows consumers are optimistic with 86 percent saying they will spend the same or more this year, than in 2018.
But, will this holiday sentiment extend to the automotive industry? According to J.D. Power, the fourth quarter hinges on consumer affordability, rate reductions and manufacturer incentives to clear 2019 inventories.
Prepare, Prepare, Prepare
Unfortunately, credit unions have their work cut out for them. According to Experian’s latest State of the Automotive Finance Market report, credit unions lost market share in the retail automotive market in the second quarter of this year. Especially glaring was the fall to 26 percent market share for used vehicle financing, previously a stronghold in the sector.
While some pundits claimed the credit unions scaled back their auto originations due to overcapacity, others point to more aggressive efforts among traditional and non-traditional lenders entering the space. Banks increased their used-vehicle market share to 36.3 percent, up 1.7 percentage points from 2018. Non-traditional lenders, including digital providers, also saw an uptick thanks to more consumers purchasing their vehicles online.