The Auto Market Brief

Pricing pressures are building across the auto market while inflation remains elevated, labor signals are mixed, and demand continues to adjust rather than retreat.

In this episode of The Auto Market Brief, Cox Automotive Executive Analyst Erin Keating and Chief Economist Jeremy Robb walk through the latest economic signals and explain how broader market pressure is showing up most clearly in vehicle pricing, inventory, and affordability, particularly in the used and used‑EV markets.

Market pressure in context:
Jeremy breaks down the latest CPI and labor market data to set the backdrop for consumer conditions, emphasizing how persistent cost pressures and mixed economic signals continue to influence buying behavior without triggering a sharp market pullback.

Pricing and supply dynamics across the market:
The conversation focuses on tightening used inventory, rising used‑vehicle prices, and why affordability risks are most acute where price‑sensitive buyers are concentrated. New‑vehicle market conditions, incentives, and day‑supply trends add important context to the broader pricing environment.

Tariffs, regulation, and industry strategy:
Erin covers ongoing tariff uncertainty, USMCA enforcement focus, Chinese market barriers, and how compliance costs, supply chain complexity, and Ford’s EV manufacturing strategy are influencing vehicle pricing and long‑term affordability.

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:

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. Hello, and welcome back to the Auto Market Brief. I'm Erin Keating, your host and industry executive analyst here at Cox Automotive.

Erin Keating:

And I have Jeremy Robb, our chief economist alongside me today as usual. Good to see you, Jeremy.

Jeremy Robb:

Good to see you too. Good morning.

Erin Keating:

Good morning. Well, we have a lot to discuss from a macro picture here, and I can't wait to hear what you say. This is signaling for the automotive market right now because we saw a lot of crosscurrents last week and this even this morning. So labor market updates came in last week, CPI print this morning, the latest retail sales data and pricing dynamics. So quite a bit for you and I to discuss.

Erin Keating:

And then on the broader industry updates, there's a lot of talks of tariffs that continue to create a lot of challenges for automakers across the globe to figure out what they're gonna do. And of course, we had the big Xi China meeting this week with Trump, and so we'll see how that turns out for the industry and for the the country at large. We have a lot of lawmakers that are banding together to put forward some bipartisan efforts to enforce barriers to Chinese entrants. And then, of course, I was able to visit the EVDC facility, which is actually Ford's Skunk Works facility. And I wanna talk a little bit about that as well as what Ford's doing these days to try to move some metal on the parking lots here.

Erin Keating:

So over to you, Jeremy. Let's talk about some of the market update and analysis you've got for us.

Jeremy Robb:

Yeah. Sounds good. So this week is a really heavy week with data on the inflation front. This morning, we got consumer price index data and tomorrow to get producer prices updated as well. The CPI this morning came in at 0.6% of an increase on a month over month level.

Jeremy Robb:

That was in line with what the market was expected and down from what we had seen in March. So that was good. On a year over year basis, it's running higher by about 3.8%. And that is a move upward from what we've been seeing for a while. It's actually the highest year over year reading we've seen since May 2023.

Jeremy Robb:

So almost three years, definitely not going in the right direction overall. The overall CPI includes the effects of food and energy. Energy prices obviously have been up a lot recently. So if you look at the core CPI though, it came in month over month a little bit hotter than expected. And so that might be spooking some people there.

Jeremy Robb:

So there's a few things we could call out here. So on the good guy side, we saw a decrease in health care insurance. It's down 6.1% year over year. So that's good. And think about food.

Jeremy Robb:

I know over the past few years, the prices of eggs have been front and center. They're actually down 39% year over year right now. Pretty So big And decrease I think you and I have talked about this before. There was a I'm gonna put you a little bit on the spot. But interesting tidbits here.

Jeremy Robb:

One is another food component, the price of tomatoes. Any idea what that is running up year over year right now?

Erin Keating:

Gosh. I should I should know this because, of course, Cox Enterprises owns a major farm, Cox Farms. I do not know what are tomatoes these days. I just had some delicious ones for breakfast.

Jeremy Robb:

And eye popping almost 40%

Erin Keating:

up Wow.

Jeremy Robb:

Every year. Yeah.

Erin Keating:

Wow.

Jeremy Robb:

So we had the tariff really impacted the imports from from Mexico, and then we had a big freeze in Florida this year too. Okay. They really took out a lot of the supply in January. And now transportation costs are eating in there So just I really like I kind of ran through the whole detail and I was like, man, that one really popped out. Something to think about.

Jeremy Robb:

Tomatoes go into all kinds of things. So we think about that, it could be really impacting a lot of different types of food. But the other one I was going to call out is airfare and the rise in airfare year over year. And that's up 21% year over year. It was up 6.3% in April from where it was in March.

Jeremy Robb:

So, you know, we think about when the Spirit Airlines filed for bankruptcy and some of these airlines have cut capacity and they're trying to ratchet that up. And I think we've talked about it internally how high airfare prices are. But that's a real number, a real increase there.

Erin Keating:

Right. Which of course then can impact their ability to use their discretionary funding for other things or might make sure that they dial back on travel, which then of course could affect tourism and other revenues that different groups. Yeah, I'm surprised by the health care number as well because we know that the ACA benefits went away this year. So I wonder how that actually went down because we know that so many people's premiums actually went up. So as as my teenage son would say, gold doesn't

Jeremy Robb:

That's sound kind of like one of those things that's like, well, it's interesting because like the cost of insurance and a lot of different things is not something that we've been seeing decline. And then the auto insurance for month, year over year was up just a little bit pretty flat, but staying at a very elevated level. So pretty important there too. Late last week, we also got the jobs numbers updated for the most recent month too. And those were more positive than expected or the market expected overall.

Jeremy Robb:

We saw a gain of 115,000 jobs, and expectations for a gain of only 65,000 jobs. And really, the jobs were led in healthcare, transportation, kind of an odd call out, but messengers and couriers. I saw a really big gain last month too. And I was talking with some people yesterday, just kind of like talking about, even though we've got these positive job numbers, information services was down, financial services were down. So it's like the quality of the jobs added might not be so great from an economic activity standpoint.

Jeremy Robb:

We had some prior revisions. If you put those two together, we still saw a negative 16,000 downward revision to February and the March numbers overall. So unemployment is holding steady, 4.3% for April. That was no change versus where we saw it in March, and it's up about 10 basis points or a tenth of a point year over year. One thing that did help that a little bit though was the labor force participation rate fell again, down just a tenth of a point to 61.8%.

Jeremy Robb:

We saw declines in women in the workforce, and then also saw declines in the population of 55 and older people. So think about retiring, baby boomers coming out of the marketplace overall. But that number, the overall labor force participation rate number, the lowest seen in my lifetime now So for the first going back to early nineteen seventy seven, so pretty long level of where we are and what's going on. And then you think of the other thing they report out on sometimes or every time, but you make note of is the average hourly earnings. And those were up year over year just 3.7% in the month of April.

Jeremy Robb:

And if we talk to think about CPI that came out this morning, CPI is running higher than average hourly earnings are a little bit. So that's what that really means for the consumer overall.

Erin Keating:

Interesting. So help me think about what it means to have a lower labor participation rate but, and a steady unemployment rate that lower jobs than expected. Put those two things together for us.

Jeremy Robb:

Well, had higher jobs created than people thought would. The change in the workforce or I'm sorry, change in people that were employed was more. But like I had said, maybe higher in health care, higher in some of these things that lessen information technology. So it's the quality of those jobs that are being created. And overall, right under 50,000 is the three month rolling average, and that number has been volatile lately.

Jeremy Robb:

So in order to stay flat on a, let's call it unemployment rate, we don't really need to create many jobs. That's worrying to some people up there too. The more that labor force, the people that are out there saying they're in the labor force looking for a job or wanting to work, if they keep declining and we look at the people that don't have a job, it can keep that unemployment rate lower, maybe a little bit mathematically lowered versus what the economy seeks. And we know for the next still several years, we're seeing more than 200,000 people, our estimates are, retire every month out there. They get pulled out of the labor force.

Jeremy Robb:

So that's one of the reasons I kind of cited the 55 and older population too. But women coming down, that's maybe not so good either. It could have to do with prices overall, childcare expenses, things like that. So there's a lot of moving factors that really come together to make that all work.

Erin Keating:

So how did this impact our sales and and pricing? I mean, over in the auto market, what does this mean for us? Because I think we had a couple conflicting signals there too.

Jeremy Robb:

We do. It's like like most things that we have right now, there's a six in one hand, half dozen in the other, they could say, depending on the way you wanna look at it. But new sales right now that we we see for the most recent data point we saw, those are still running down about 6% year to date. And that's kinda consistent with where they've been for a while. However, if we stick of the same week against last year, they're actually up 2%.

Jeremy Robb:

So last year in late March and early April, we saw a lot of strong pull ahead sales. Those started to come down. I think it's kind of interesting that one week we're seeing a higher comp on a year over year basis. That was right the April. So a lot of new car sales happened right then.

Jeremy Robb:

Days supply is up about 9% versus where we were this time last year at seventy five days. But that came down a good bit last week too with all the new vehicle sales that we saw. So we can ebb and flow on a weekly run rate. But overall this year, not as good as last year, but actually quite a bit better than like 2023 and 2024 were. So definitely we need to call that out to people.

Jeremy Robb:

Last year was a really strong year, especially this time last year. Used sales are actually running down a percent right now on a year to date basis. They're down about 4% versus the same week. We saw them a little bit stronger in like early Q1. They peak at the March.

Jeremy Robb:

They've been coming down seasonally normal. Day supply sits at forty three days, is actually down a percent year over year. So the used market remains relatively tight. That goes into pricing. We have seen used prices right now have been up for seven weeks in a row.

Jeremy Robb:

We know the Manheim data was really strong. Dealers come in, they buy vehicles from Manheim. It generally takes four to six weeks to see prices at Manheim show up prices at retail, that correlation there. But used prices are up 4% year over year to levels we haven't seen since November 2023 overall. So actually, you you think about inflation, you think about affordability, you think about where wholesale prices are and the fact that they're maybe they're you know, we're in the depreciation phase, but we're not depreciating any faster than we would normally, which means the overall rate is staying elevated.

Jeremy Robb:

That can play right into just affordability and overall for consumers there too. The top 53 year old used vehicles moved above $30,000 on a weighted average. So that's kind of a call out. Like, we haven't really seen that before. It's up 4% year over year, too.

Jeremy Robb:

But then interestingly, just my last point here, we talked about it some recently, We are seeing more demand for EVs, and we're seeing day supply decline in both the used retail market and the wholesale market, and that's translating to higher prices. So the top three year old used retail EVs right now, they've been rising every week since the March. They're up now 6.5% over where they were last year. So that's kind of noticeable. And then if we look at our Manheim three year old EV index, which we've talked about, it's been outpacing the non EV index for six weeks in a row.

Jeremy Robb:

And it's up 11% since we started the year. And that's five points above non EVs. So like we just said, when dealers buy at Manheim, it takes four to six weeks to see those prices come into the retail market. We're telling you retail prices right now for EVs are already higher. Likely, they're gonna continue to be higher for some time.

Jeremy Robb:

And gasoline prices, even as of this morning, still sitting above 4 and a half dollars a gallon nationwide. So Right. You know, that's gotta be playing into what consumers are thinking about. And the higher I think the higher it stays above the $4 a gallon mark, the more we get into the consumer psyche of of the people that are shopping for a car, what they might want to.

Erin Keating:

Right. No. That's interesting. And I think, you mentioned affordability in light of these used car numbers, and I think it is something that the industry doesn't think about often enough because we're always looking at the ATP for new vehicles, but a majority of the transactions are are out there happening in the used market. And if those prices are actually high, those are what price sensitive customers are really seeing.

Erin Keating:

And and that's where we really get into danger zone of affordability context. Right? And then at used EVs, we won't spoil it, but everyone stay alert for the Cox Automotive dealer sentiment index that will be coming out in a few weeks. A couple of things that we learned there about dealers and and how they're thinking about used EVs. Well, yeah, it's a complicated picture out there.

Erin Keating:

And again, it's I think we talked about it in our team meeting even. Is everything just changing? Like, are there some fundamentals that we just need to to readjust our brains to because of all these crosscurrents? But thanks for helping elucidate them for us and bring us up to speed on where we are. It's a lot of data coming out.

Jeremy Robb:

Always a lot of data coming out. Yeah. Good thing. Like to talk about it.

Erin Keating:

Absolutely. Thank you.

Jeremy Robb:

See you next time.

Erin Keating:

So now let's just dive into a few of the industry updates. As I mentioned, tariff talks are just continuing to keep the market guessing. We did hear about how Trump has threatened an additional or going back up to the 25% specifically for EU. He's posturing for now. We have not seen any official documentation that that 25% is going to go into effect, but as initially, it was claimed because the EU has not solidified their end of the argument there.

Erin Keating:

There's a couple of other speculations of how geopolitics might be playing into this, but we're definitely keeping an eye on this because this is going to heavily impact the German automakers if this comes into play as everyone has likely read about. Specifically Volkswagen, playing at both ends of the market. That's really troublesome and especially for their luxury brand Audi as there is no US production base for for Audi nor for Porsche. We do have BMW and Mercedes mixed up there as well, but luckily for them, they do have a decent amount of US production. And so we'll we'll stand by and wait to see what happens there, but that would be a significant blow to the European manufacturers.

Erin Keating:

The USMCA is really coming into focus now. We're only about two months out from when they need to at least make a decision on whether to move forward or not on discussions. One of the interesting things is that it's becoming more and more clear what the administration is thinking about doing there and shifting really to enforcement. They are looking at a May 25 kickoff discussion with, you know, that July soft deadline, and it looks like they're really focusing on Mexico now. Canada seems to be still sidelined.

Erin Keating:

And what's interesting is that there's actually a new auto group that formed in Canada to really try to focus on their efforts to getting to the table to talk about the USMCA. So we'll see how that continues to come into play. And we know the Detroit three are specifically, at least GM and Ford, are specifically really concerned about Canada, as should Honda be, etcetera, etcetera. I happen to be in Toronto right now, and I will tell you the amount of Honda Accords in Civics I've seen here is is quite prevalent. So it will be really interesting to see how those continue to come to bear.

Erin Keating:

The other interesting thing is that the tariff refunds that are coming back to the automotive industry because of the original IEPA tariffs. Now they are still a very small portion of how the auto industry was impacted because they, of course, they don't account for the section two thirty two tariffs that are the large portion of tariffs for the automotive industry. But there were some tariffs at play, refund play at play, especially for the Detroit three with the IEPA being withdrawn. So we're seeing that some of those tariff refunds are helping them offset some of the costs that have come in for them over the last year. Additionally, Washington has been very vocal about moving bipartisan lawmakers towards raising the barriers for Chinese entrants.

Erin Keating:

If you understand that there was the Department of Commerce BIS ruling that did come out under the Biden administration, that was to have software and hardware from Chinese backed companies to be out of the systems of vehicles by 2027 and 2030. Senator Bernie Moreno, as well as another senator Slatkin both came forward with the Connected Vehicle Security Act of 2026. This is meant to try to secure that ruling and actually make it even tougher to pass. So that's coming from the Senate. Then there are bipartisan lawmakers in the Congress that sent letters independently.

Erin Keating:

The GOP as well as the Democratic Party sent specific letters trying to limit market entry and really tightening the rules around Chinese made vehicles as well as componentry and batteries, which, of course, would impact quite a few of the American manufacturers as well as manufacturers that are operating in America because several of them have actually created deals with battery manufacturers that are Chinese backed, etcetera. And, you know, the other thing that's really interesting just to mention there really quickly is that while we have been relatively successful at keeping the Chinese automobiles out of The US, Chinese auto parts are really deeply embedded in the supply chain. And as these rules come to bear, it will just be really important to keep an eye on which manufacturers are going to be impacted by any kind of rulings that are saying that Chinese backed companies may not be in the cars period, you know, through componentry, through any parts, through wireless and, you know, wire harnesses and things like this. So it shouldn't be ignored that these types of things also cost the manufacturers even if the regulations don't come to bear because the supply chain is so complex.

Erin Keating:

The amount of money that they have to spend on administrating the procurement of these materials and componentry, it just adds to administrative workload and it adds to the actual cost and expense of manufacturing vehicles. And this is where we continue to see pricing show up in vehicles, Right? So it's not just about regulatory environments on how you build vehicles. It's not just about preferences or product shift or anything else like this. It is also about just the sheer amount of compliance workload that automakers have to look at and spend money on.

Erin Keating:

So just little things for everyone to remember when we're talking about affordability as a whole. It's a very complex industry, and pricing is very complex, and a lot of things really contribute to how pricing is being driven up, including rules like this that may sound on the outside like they should be absolutely implemented because we don't necessarily want Chinese backed vehicles in the market. We don't want to necessarily ruin our manufacturing base. However, it could have other side effects. So just keep that in mind.

Erin Keating:

The other two big things that I wanted to talk about were one of the Detroit three. And I know we keep talking about them, but they're very important to the market. And Ford specifically had two big headlines. I actually had the pleasure of going to the EVDC building there in California. They had this out of outside Long Beach, and they previously were sort of referring to this as Skunk Works.

Erin Keating:

Real fascinating place. So this is where Ford has basically put together a team. Most of them, I think it was he said over 60% of the individuals at that particular manufacturing site are not former Ford employees. So all brand new to Ford coming from other, you know, standalone EV manufacturers from the technology industry, etcetera, etcetera, who've come together to try to redesign a universal platform for electric vehicles. And this is all under the guise of Ford looking to be able to come to market with an under $30,000 electric pickup truck.

Erin Keating:

This is what we've at least been told that it's likely to be a pickup truck. But what it really isn't is an experimental playground as far as I saw. It was very, very cool to see the integration, you know, typical manufacturers, one example is, have to work through purchasing to get any componentry into their vehicles. So if you think about an engineer designing a seat and then having to actually go through procurement to send out drawings for these seats, get the seating manufacturer to put together a bid, bring the big back, bring an example back so that the team can actually test it, so on and so forth. We've already eaten into three, six months of the process.

Erin Keating:

And when we think about reasons why Chinese manufacturers are really beating everyone to the punch and being able to save costs, it's not just that they're able to use cheaper labor or that they have state backed subsidies. It's also their ability to go speed to market because they have such vertically integrated supply chains. And so interestingly enough, Ford is really experimenting with this right now. And it was pretty cool to see in action, will say. Being able to walk into the upholstery section of the site and see how they're immediately giving feedback between the design and engineering team, as well as the team that's looking at building the seats.

Erin Keating:

It's just one small example of how when teams are well integrated and communicating, failing fast, etcetera, etcetera, that you could really find some cost efficiencies there. And it will be really interesting to to see if they can pull this off not only for the universal platform, but also what does that look like for future integration into the Ford manufacturing period. So something really interesting to keep an eye on. And, there's still a focus for electric vehicles. As Jeremy and I talked about earlier, electric vehicles are not going away.

Erin Keating:

They're continuing. We're seeing this uptick in in interest in used EVs and interesting to see that some of the domestics are not letting go of this particular powertrain. The other thing that Ford's doing is helping to move the metal on the combustion engine side as well as, you know, the existing EVs that they have in the market. American Value for American Values. This is their latest employee pricing for all.

Erin Keating:

It just shows us that some of these manufacturers still need to be able to to move the metal through incentives. We don't see incentives going through the roof just yet, But anytime there's a major campaign coming out to put pricing like employee pricing out in front of everyone, and they're doing it for their Ford Pro as well, you know, employee pricing from our business to yours is the motto there. It makes us just pause for a moment, especially considering that Ford has had some production shortages in their f one fifties, which, of course, is the number one best selling pickup truck out there. So the fact that they could continue to offer incentives on the other models while they're suffering from a production shortage on one of their biggest models or their biggest model just goes to show that profitability is still a bit of a challenge and that sometimes chasing volume is going to help in that particular instance. So we're going to keep an eye on whether other manufacturers follow suit and if we start to see more discounting come into the system.

Erin Keating:

But it's worth noting when one of the major automakers steps into that line of fire. So remember to check out all of our insights and updates at coxautoinc.com. Stay tuned for our next episode of Auto Market Brief. And, course, please feel free to go back and listen to a couple episodes. We recently had one on the fixed operations and ownership study, which was really interesting.

Erin Keating:

Please subscribe, share. It's really great to hear about the high notes in our economy and the headlines that are popping for us, as well as hearing from some of our individual experts at Cox Automotive and other partners about what's happening specifically in their worlds. So thank you for joining us today for the Auto Market Brief. We will catch you next up to date with all the latest news and perspectives from our team of experts, be sure to visit our insights hub at cox auto inc dot com.