Jobs Slow, OEM Pressure Grows in the Auto Market

Jobs market momentum is slowing and automakers are under pressure. What does it all mean for sales, credit, and pricing decisions across the automotive market?

From labor market weakness and rising debt levels to disciplined incentives and inventory strain, this episode breaks down the forces reshaping demand, profitability, and strategy as we get further into the first quarter of the year:

• Labor, productivity, and economic risk: Job growth revisions reveal a cooling labor market, while productivity gains and wage growth complicate the outlook for consumer demand, GDP, and recession risk. Erin and Jeremy explore what the current “low hire, low fire” environment means for automotive retailing and long-term sales momentum.
• Credit availability and consumer pressure: Auto loan rates, APRs, and credit availability remain relatively stable, but rising subprime share, negative equity, and growing delinquencies (especially in student loans) signal increasing pressure on consumers and lenders heading into tax refund season.
• Automaker performance, pricing, and inventory: OEMs navigate tariff-driven cost increases, supply chain disruptions, and disciplined incentive strategies as MSRP, invoice, and average transaction prices compress. Inventory levels, days’ supply, and production decisions are setting the stage for an intense market-share battle across key segments.

The Auto Market Brief delivers timely data, clear context, and practical insight to help industry leaders make smarter decisions—what’s happening now, and what’s coming next.

The Auto Market Brief is powered by Cox Automotive. For more industry insights and expert perspectives, visit our Insights Hub at https://www.coxautoinc.com/insights.

Creators and Guests

Host

Erin Keating

Erin Keating is an Executive Analyst and Senior Director of Economic and Industry Insights at Cox Automotive. She brings 30 years of professional experience, including 14 years in the automotive industry, providing analysis on market conditions, automaker performance, and consumer demand shaping the economics of the new-vehicle market. Erin spent 10 years with Audi of America, including leading Audi Motorsport North America, informing her perspective on both commercial strategy and competitive dynamics.

Guest

Jeremy Robb

As chief economist at Cox Automotive, Jeremy Robb oversees the enterprise-level economic outlook, monthly forecasts, client advisory, media briefings and the strategic integration of data from the company’s extensive retail and wholesale platforms. Jeremy leads Cox Automotive's Economic and Industry Insights team, working directly with clients and executive leaders in sales, strategy and finance. He draws on his background helping companies consume data and insights to make better business decisions. He has been focused on finance and strategy for large corporations in the financial services and automotive industry for the past 20 years. Jeremy joined Cox Automotive in 2018 after spending 6 years at Nissan where he led functions in finance and remarketing.

What is The Auto Market Brief?

The Auto Market Brief, powered by Cox Automotive, breaks down the latest trends and forecasts shaping the automotive industry. The show is hosted by Cox Automotive Executive Analyst Erin Keating, coupling years of experience translating data and trends with the data and industry insights of the largest automotive services and technology provider.

Joined by other Cox Automotive experts and outside guests, you’ll get data-driven insights and industry outlooks from some of the industry’s leading voices.​

Erin Keating: 00:03

Welcome to The Auto Market Brief from Cox Automotive. Each episode, our experts and special guests break down the latest trends, insights, and news shaping the automotive market. We'll give you the information that truly matters so you can make smarter decisions and drive your business forward. Welcome back to The Auto Market Brief Podcast. I'm your host, Erin Keating.

Erin Keating: 00:29

Excited to be here with chief economist, Jeremy Robb. This is a newly announced position. So congratulations to you, Jeremy. Today, we're gonna cover off on a couple of different topics. We're gonna be working through what we're seeing in the labor market, in credit availability, and a couple of other macroeconomic conditions.

Erin Keating: 00:48

But, Jeremy, I'm gonna take us through a couple of highlights with what's going on with the automakers. We're just off the end of the National Association of Dealers conference that happens every year. So lots of sentiments coming out of that, but I'm looking forward to just getting started and kicking in here. Jeremy, what are you seeing out there as we are hitting the February?

Jeremy Robb: 01:09

Yeah, thanks, Erin. Great to be here today. There's a lot to talk about. It's been a minute since we convened around some of our high level topics. So I'll just start off really high level thinking about sales on the new car side in January.

Jeremy Robb: 01:23

Those were tracking to be okay for the month. Then we know that snowstorm hit really the Eastern Half of The United States and really slowed down a lot of what we were seeing in the last week of the month. That ended pushing our January start rates to about 14,900,000. That was lower by about 3.5% year over year, and lower than the estimate we had out there. The sales volume we had for January was about 1,100,000 units.

Jeremy Robb: 01:48

And that was actually 0.6% higher than what we saw last year, but boosted a little bit. We had another selling day in January 2026 versus what we had in January 2025. Our report outs on prices, we saw that prices were down overall on the new car side a little bit about 2% in January from December. December is typically a pretty strong mix of luxury, so that pushes prices up. But interestingly, and I know a lot of people have talked about this, thinking about tariff impacts there, we didn't see incentives rise a lot.

Jeremy Robb: 02:21

So, you know, that's, I think, a pretty important point, and one I know that everybody's going to be following as we move through this year too, to see what happens on that front.

Erin Keating: 02:30

I was just gonna I was just gonna interject on the the sales story real quick because we, of course, just pushed out our inventory story and day supply rose up to 96 days. And just interestingly enough, I think your sales story actually tells us more about what's going on. We're seeing that the automakers are holding they're holding their discipline in production because even though sales days is up, that's really talking about the velocity of sales. Inventory has actually been stuck at around 2,700,000 in inventory. So it's not like the they're not piling up on the lots because they're getting all this new allocation.

Erin Keating: 03:00

It's really a matter of how slow the sales have been this month.

Jeremy Robb: 03:03

Yeah. Yeah. And definitely the inventory, we could talk a whole thirty minutes about that. But one of the things happening with some of the inventory, especially as we view it from last year, we've seen a real tick down in EV inventory putting in hybrid inventory levels. And that's pulling that toll down a little bit.

Jeremy Robb: 03:19

The ICE units are pretty flat on the inventory level, hybrid's up a little bit. So there's different stories going on there that can be broken apart. I know you talk about that in a lot of detail too. But if we move on, looking at some of our other big picture things, one of the things we talk about at Cox a lot, we have some great data on, it's called our Dealertrack Credit Availability Index. It came out just this week also.

Jeremy Robb: 03:42

It held steady at 100 for January 2026, and that was actually its best level since October 2022. But if we look kind of under the hood, we see some different things there. One of the things we saw was that subprime share was up, it was up about 70 basis points in the month. That's up almost three full points year over year. That actually indicates a rising appetite for credit, and helps that credit availability metric go higher.

Jeremy Robb: 04:07

Negative equity share was also higher, and that is indicative of lenders being willing to finance more negative equity out there too, and that helped also. But then on the other side, we saw that yield spreads widen. So that's kind of the difference between the market interest rate and what lenders are going to give to consumers out there. And as that widens, right, that is showing a tightening metric for them. So that's kind of what happening, but at still level of a 100, we haven't seen that for a while.

Jeremy Robb: 04:39

That's pretty good out there too. Now, two other points for me. One thing really big out there, we talk about job growth and what's been happening with jobs overall. Over the last couple of weeks, we've gotten a lot of data on jobs. One of the things I just want to highlight here, is we saw that openings for job openings have fallen by more than a million jobs over the last three months.

Jeremy Robb: 05:01

So that's a pretty big reduction of just jobs that are out there for people to go get ties into a lot of the things we're hearing about the labor market. And then also seeing those tightening immigration policies have kind of reduced the labor force That makes a lot of economic forecasters suggest this break even rate of jobs added could be as low as 20,000 a month. I say that as kind of a setup to the numbers that came out earlier this week on the January employment report, because with those numbers, we got the jobs numbers, we got all these benchmark revisions, and then we got the new unemployment rates too. So the jobs report for January itself showed that 130,000 jobs were added, And that was, you know, better than the estimate of 68,000 jobs. But really the number for January is kind of being looked past because we had all these negative revisions from these benchmark revisions that happened.

Jeremy Robb: 05:57

Before we had the report out yesterday, it looked like the economy had added 584,000 jobs in 2025. That was a pace of about 49,000 jobs a month. But when we revised the total, total job growth for 2025 was only 181,000 jobs, which means it's a monthly average of just 15,000. That's really low. That really ties into that number I was just talking about with that lower immigration impact on the labor force and what some people think.

Jeremy Robb: 06:25

You know, we've talked about a jobless recovery in the economy due to AI spending and things like that. You know, all these things are factoring in. And I think I look back this morning doing something and really we've seen pretty anemic and a lot of times negative job growth all going back all the way now to April. So not a good point of view there. The unemployment rate was down to 4.3%.

Jeremy Robb: 06:50

So it's actually fallen two months in a row. It's up a little bit about 30 basis points year over year, but really just kind of a not a great story, but not really a lot different than we thought. And that benchmark revision, I would say, even though it was down substantially and it took a lot of jobs out of the system, it was right around what people thought it was going to be.

Erin Keating: 07:10

Does the low fire, low hire environment still stand true then? And is there, I mean, do you see any danger in that continuing for a long period of time?

Jeremy Robb: 07:20

Yeah, it's a good point. You know, we've seen, like recently Amazon announced more layoffs. There's another company, I can't remember top of my mind that did, and all those are related to tech and technology and those kinds of things. Amazon, I think has been in the news over the past six months for announcing some layoffs a few times. On a broad, more broad base, we haven't seen that really pan out to a lot of other parts of the economy.

Jeremy Robb: 07:48

So not yet in a higher amount of, you know, firing situations, but still very much treading water and, you know, only seeing 15,000 jobs at a month is a really low level. I tried to go back and see when the last time we had that level, and it's hard to see outside of a recession area when you find that. I think that speaks to this AI environment that we're in, the productivity gains that we're seeing, and what that's driving in the economy overall. And then, you know, just finally for me to wrap up, there's a report that's get put out by the New York Fed. It's a little wonky if you don't read it, but it is a really great report quarterly.

Jeremy Robb: 08:27

It is called the Household Debt and Credit Report that also came out this week. It really highlighted these growing debt balances across the consumer landscape. They talk about mortgages, talk about credit cards, auto loans, student loans, and all of that, show you delinquency rates. And so it's a really good report of consumer credit and debt levels also. So we think about the automotive market, we saw that auto loan balances, they were up a little bit in the last quarter, that was for Q4, increasing just 12,000,000,000.

Jeremy Robb: 08:59

That's a pretty tepid growth rate. So it shows that consumers are still cautious, but new originations for automotive loans on both the new and used side totaled 181,000,000,000. That was up about 3% year over year, but a little bit down from where they were in Q3. I was looking at credit quality, they've got some readings on that. But the average credit score for loans declined to 716 in Q4 from 724.

Jeremy Robb: 09:24

That's pretty indicative of a lot of the data we see too, that there's more subprime mix going on. They reported that subprime mix of loans increased to 18%, up from 16% in Q3. So more of that happening too. And then just finally, the other thing, there's lots you could point out here, but the last thing I want to point out is the student loan piece of that. Student loan balances increased to almost 1,700,000,000,000.

Jeremy Robb: 09:46

That was up about 11,000,000,000 in the quarter, but those delinquency rates, and that's on a ninety days past due, so you've missed about three months of your payment. They're up 21 basis points in the quarter to about 9.6%. So pretty high, you know, those were put off for a lot of consumers out there. They've come back, they've caught a lot of interest over the past year or so, but still remain pretty elevated. And really, lot of the delinquency rates that we look at are elevated as well.

Jeremy Robb: 10:14

We are in the time period, if you're if you're not aware of this, right, where we typically will see delinquency and default rates be the highest of the year from a seasonal standpoint, usually peaking in February, right before all these tax refunds come back and people get more credit. But even with that said, we're still seeing growth in those rates on a year over year basis. So a lot of factors out there. We don't have any data yet on tax refunds. We think we'll get some on Friday, they should have came last week, but they were delayed.

Jeremy Robb: 10:47

All indications that we have are that that is going pretty well from the data we're seeing at Manheim and in the economy overall. But then we've got these other things that aren't so good. So it's kind of a one hand on the other hand, if you will.

Erin Keating: 11:00

Right. Right. It's a lot to balance given that we I mean, we did make the projections that we were going to go down in SAAR back to the twenty twenty five levels or 2024 levels of 15.8 this year. Right? But it is an interesting market for sure in that K shaped economy, so to speak, like depending on which numbers you're looking at, you feel it either really acutely or you're going, I don't know if it really makes sense.

Erin Keating: 11:20

So, it's that's a lot to consider, especially this debt piling up.

Jeremy Robb: 11:25

Yeah. That debt one is like, that's a thing. We'll see. We'll see what happens. We're usually at the peak of that too.

Jeremy Robb: 11:30

So you high delinquencies, high debt levels, and it'll, you know, maybe come down a little bit too, but it just goes to show you for consumers out there, there's a lot competing for every dollar they have in their pocket.

Erin Keating: 11:41

Absolutely. Well, thank you so much, Jeremy, for that macro picture of what's going on at the top. Couple of things I just wanted to point out this week. We are also in the the time frame where we're starting to get year end reporting from other manufacturers. So the Detroit three were all the talk of the town.

Erin Keating: 11:58

Right? We saw that GM and Ford continued to post major losses because of the tariffs as well as some major write investments. And so that continues to be a story moving through how 2025 went and still an indication as to how those tariffs specifically are going to continue to hamper their ability to move their capital around in 2026. So we do suspect that, again, we're gonna start seeing some of those upticks in prices because they are continuing to absorb pretty substantial tariff hits. And one thing of interest there, which people may not be considering, we heard of the Novelis plant fire that happened back in September.

Erin Keating: 12:44

And, you know, at the time, we all knew, okay, that's a lot of aluminum. That's the F-150 Ford has pretty a heavy dependence, but so do other manufacturers on that particular plant. It supplies about 40% of the aluminum that we actually use in the manufacturing of vehicles here in The United States. And so it wasn't just that it shut down the supply chain for a minute. It forced Ford and others to have to look to more imports from other countries for aluminum and the materials that they needed.

Erin Keating: 13:14

And of course, that's sort of a double whammy. So a, they get a slowdown in their factory production because one of their key suppliers has now gone offline, and they then naturally have to go offline or at least slow down tremendously because of that. But then the kicker really is that to catch back up with getting the supply they need, they're having external outside of The US for that steel and aluminum. And we know that that's actually one of the categories of imports that is subjected to that sector two thirty two tariffs, and they're getting hit pretty hard. And so that's adding, you know, sort of insult to injury when it comes to the total tariff bill.

Erin Keating: 13:51

Now we do suspect by May that plant is gonna come back online fully and hopefully will then start to cut down on the tariff impacts that they're getting for those additional supply. But it just continues to point the, you know, the arrow at how automakers are really struggling to look across their profitability, and all their production lines and what they're putting out in the market, their cost structures. So they're under a significant amount of pressure. And then on the flip side, they're also starting to pass along more of those tariff costs in the form of increased invoice, which of course then impacts our dealers because invoice and MSRP and invoice and ATP or average transaction price are getting closer and closer. So the dealers are having to come to the table with a lot of that discounting if the automakers are not with incentives.

Erin Keating: 14:41

And as Jeremy noted in the beginning of the session, we are hearing that automakers are putting up less incentives. We're seeing that in the data. So just keep all of that in mind because it it continues to be a big picture item for the industry to to see what is happening at the automaker level because that always has a trickle down effect to the remainder of the industry. But interestingly enough, nearly every automaker came out of NADA touting that they're going to increase their sales. And a colleague and I were joking this week saying, wait a minute.

Erin Keating: 15:12

We're actually anticipating that the SAAR, the annual sales volume is going to go down from $163,300,000.0 that we saw in 2025 to the levels we saw in 2024, which is 15,800,000.0. So pie getting smaller, but manufacturers, you know, believing that they're going to take a larger part of that pie. So it will be really interesting to keep an eye on which automakers make some really aggressive moves to go after market share. And we saw this last year with tariff impacts that it really became a market share battle. It became a protection battle of making sure that where you were strong in segments, that you maintained your pricing power there and that you didn't push those tariffs on into those segments so that you wouldn't lose any market share.

Erin Keating: 15:56

2026 is absolutely gearing up and showing that it is going to be a battleground out there across all of the automakers and especially in really significant segments such as compact, subcompact SUVs, even the cars. You know, Toyota and Honda continue to do a really great business with their Honda Accords and then Toyota Camrys and Corollas. So it's gonna just be a really juicy year to keep an eye on what's happening from a sales perspective and how the consumers are reacting to that. The other thing that came out of NADA from the automakers is that there's obviously a desire for them to make business a little bit easier for their dealers. So things like Chevy opening up assets and and cars are actually available at ports.

Erin Keating: 16:40

So allowing their dealers to get better access to quicker inventory. And then you've got Ford who actually created a new team of regional players, and this will especially help the smaller markets and smaller dealers. You know, the one , two rooftops where they'll be able to have more regional representation to help them with fixed ops and with allocation and with sales and marketing support. So knowing that the automakers are really relying on the dealers to push in their local markets for that competitive market share is is interesting to see a lot of them are really trying to dial in how can they help the dealers. And to that point, there are a couple of automakers that were even more optimistic than you might have expected, especially given how their performance has been over the last couple of years, and that is Nissan.

Erin Keating: 17:29

Nissan dealers seem to come out of this feeling a little bit more optimistic about what's gonna happen in the future. They've just had a new VP of sales and marketing come in, and so we'll see how that's gonna go. Stellantis, you know, given Filosa's Antonio Filosa's, the CEO, is focused on bringing back popular models like the Jeep Cherokee and getting pricing back into line with what their typical customers are used to seeing. You see some exuberance over there with the Stellantis dealers that you certainly haven't heard in a few years. And then even if we're looking at the premium sector, Audi's really been suffering over the last couple of years.

Erin Keating: 18:05

And even those dealers came out of the meetings feeling a little bit more optimistic because of the pullback on EV investments and feeling like they're gonna have the right product, especially in the competitive segments coming into their showroom. So, you know, it's sort of like how Jeremy was talking about the economy. It's like a lot of the market conditions look okay, but consumers clearly in the background are either piling on debt or feeling, you know, we see it in the sentiment data that they're feeling a little bit nervous about everything. The same thing sort of happening over there in the automaker world. You know, we're seeing the k shaped effect, if you will, on automakers.

Erin Keating: 18:41

And on the outset, it looks like everyone's feeling positive. Again, we'll be tracking to see how much of that positivity sticks around and or is valid as we move through the year. So that's been, of course, part of the story that we've been following. And then lastly, what I would talk about is just the AI and AV topics. So AI, autonomous vehicles, and electric vehicles.

Erin Keating: 19:02

So we know that the electric vehicles are a big topic because the credits went away, and there are multiple automakers that are pulling back significantly on production with EVs. Some have even canceling electric vehicle models that they have. So it will remain to be seen how organic demand continues to shape up through the year with electric vehicles. And what we didn't talk about in the opener, but what continues to be at the forefront of our mind is that we have a lot of used EVs returning back to the market. So really interesting to see what consumer adoption looks like even in the used EV market.

Erin Keating: 19:35

And then from an autonomous perspective, we saw that Tesla has now said, hey, we're moving to a subscription model with their full self driving product. And so that will be it's obviously a good thing for Tesla to be able to build that reoccurring revenue model, but to see whether clients really are okay with adjusting to a monthly fee as opposed to paying for it outright. And then we see things like Waymo who are really close to getting approval at the San Francisco Airport. There was an announcement that they did get the approval, and then there was announcement that there were a couple of hang ups. So we'll see if that completely comes to fruition.

Erin Keating: 20:12

And then even Uber has been continuing to announce partnerships across the ecosystem to enable it to help better move robotaxis into the forefront in the mainstream. So really a lot of different avenues that the that the automotive market is exploring for this year. And, again, more optimism than I would have anticipated, but glad to hear it. Glad to see the fighting spirit coming from all of the automakers and the dealers getting pumped up because, you know, who knows? We may again see our our forecast needing to get pushed up or put into a range midyear like we did last year.

Erin Keating: 20:49

And, certainly, we'd all be happy to see more sales come through, especially if we can get the economic conditions to stay strong so that people maybe start to change some of their sentiment towards their finances. But as Jeremy said, the k shaped economy, that's gonna continue to be a challenge. And, you know, it's a low it's a low product introduction year. So those dynamics are gonna continue to play into the full picture. But that is how we are kicking off 2026.

Erin Keating: 21:14

Always great to be with the dealers at NADA. You always just get some really good insights be it by being on the ground with all levels of the dealership and and, again, running into those automakers and hearing what they're actually saying to their dealers to kick off the year. Thanks for joining us on this episode of the auto market brief. To stay up to date with all the latest news and perspectives from our team of experts, be sure to visit our insights hub at coxautoinc.com.