New car sales surge, dealership M&A market heats up, Nissan’s troubles escalate

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Welcome to The Weekly, your go-to roundup of the top five auto industry headlines of the week. Let’s dive in.

1. SUV market share sets record but prices remain constrained

SUVs now make up 58% of vehicle sales this year, a record-breaking market share, while smaller cars have dropped to a historic low of just 19%. 

The catch? Affordability. 

• While SUV prices have risen 44% over the past 20 years to $46,211 — automakers have intentionally kept them somewhat in check, so as not to alienate their core audience: families.

• But pressures are mounting. Even with a slight 1% drop in average vehicle prices year-over-year, the market remains stretched.

“Producing the bigger vehicles that consumers desire at prices they can actually afford is an arduous task,” said Jessica Caldwell, Head of Insights at Edmunds.

Why it matters: SUVs have become the backbone of the auto market, but the long game will test manufacturers.

(Go deeper: 3 min. read)

However — stubbornly elevated car prices aren’t deterring some consumers…

2. U.S. new vehicle sales ramp up as year winds down

Nov. is shaping up to be a big month for new car sales. Analysts are projecting an annualized sales rate (SAAR) of 16 – 16.5 million, up from 15.3 – 15.5 million a year ago. Total sales could reach 1.32 – 1.36 million vehicles — a 6.6% jump year-over-year. 

What’s fueling the spike?

• More cars to sell: New vehicle inventory crossed 3 million in early Nov. — the highest since the pandemic and up 677,000 units from last year. 

• Bigger discounts: Incentives now make up 7.7% of the average sale price, the most since Apr. 2021. And leasing — a major incentive driver — has climbed to 23% of retail sales.

• Confident buyers: Post-election stability and improved consumer sentiment — up 17% year-over-year — are driving $49.8 billion in spending.

Bottom line: Auto retailers will likely end 2024 on a high note with bigger incentives, but automakers could keep MSRPs high — or even raise them — if tariffs come into play.

(Go deeper: 4 min. read)

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And if tariffs do come into play, dealers and automakers will eat some cost — cutting into their profitability…

3. Dealer M&A heats up in Q3 despite profitability slide

The dealership buy/sell market is finding its footing as dealership profitability continues to decline from pandemic-era highs, falling 28% year-over-year in Q3 and 7% from Q2. 

Despite this, mergers and acquisitions (M&A) gained momentum, with transactions rising 10% quarter-over-quarter. So far, 389 stores have been sold this year, down 13% from 2023 but still on track to make 2024 the fourth-busiest M&A year ever.

By the numbers:

• Blue sky values dropped 12% from last year’s all-time highs to $21.3 million on average, with declines driven by brands like Nissan and Stellantis. 

• But brands like Toyota and Honda stayed steady. Meanwhile Mazda saw a sharp rise in valuation due to fewer stores with higher throughput, safeguarding profitability even at a time when earnings are down almost everywhere.

Big picture: The industry is at an inflection point. Dealerships that align with high-performing brands and diversify revenue streams will position themselves well for the future. 

(Go deeper: 4 min. read)

Speaking of Nissan — anonymous sources say the automaker is in dire straits…

4. Two unnamed Nissan execs. say the company has “12-14 months to survive”

Nissan’s financial troubles are reaching a breaking point, with profits plunging 85% in the first half of 2024, largely due to weak North American performance. According to insiders cited by the Financial Times, the automaker may have just 12 to 14 months to turn things around.

Driving the news: Honda is reportedly considering taking a majority stake in Nissan. 

• The two companies, alongside Mitsubishi, already collaborate on EV development, and Renault, a key stakeholder in Nissan, supports Honda stepping in.

• In the meantime, Nissan is cutting costs wherever it can. U.S. production is set to drop 17% this year, and 9,000 jobs were recently eliminated. 

• Even so, the company has issued a profit warning, leaving investors uneasy.

Bottom line: Nissan’s refused to comment on the report, claiming it was “speculation” but if it turns out to be true — the automaker’s days could be numbered.

(Go deeper: 1 min. read)

But another struggling automaker — Stellantis — is not going down without a fight…

5. Ram CEO teases new mid-size pickup, details coming in 2025

Ram is gearing up for a long-overdue return to the mid-size truck market, aiming to fill the gap between its compact Rampage and full-size Ram 1500. CEO Christine Feuell confirmed the project is moving forward, but the details — platform, design, and timeline — remain a mystery.

The big questions: Will Ram go rugged, building a body-on-frame truck to challenge the Toyota Tacoma and Ford Ranger? Or will it follow the unibody trend, targeting casual drivers with something more lifestyle-focused like the Ford Maverick or Hyundai Santa Cruz?

Bottom line: The mid-size truck market is booming, and – if priced right — Ram could hit the sweet spot for dealers and buyers alike — offering a balance of affordability and value the market is craving.

(Go deeper: 3 min. read)

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• California’s plan to keep EV rebates rolling.

• As EV sales slip, Porsche shifts focus to hybrids and ICEs.

• Volkswagen workers to stage warning strikes early as next week.

• Trump’s tariff plan could add $2K to American-made car prices.

• Ultra-luxury automakers confront challenges in key markets.

That’s a wrap for now – make sure you’re following along on X, LinkedIn and IG for more real-time updates.

🚨 Hey you! Before you go…

Thanks for reading. Hit reply and let me know if you found this week-in-review valuable or have any feedback. I’ll see you next weekend.

—CDG

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