DEARBORN, MI – The auto industry can get thrown for loops. Those include amped-up tariffs, mass recalls and parts shortages that recently clawed into production levels.
But one thing about this industry stands out for Steve Rowley, now in his fifth year as president of Cox Automotive, a product and service provider.
“I’m amazed at the resiliency of this business,” he says. “From OEMs to (auto-related) companies to dealers, they really manage it in an effective way.”
They’ve got their work cut out for them during these uncertain times.
For example, tariff policies of the Trump Admin. “are changing the way of doing business,” Rowley says here during a Cox media presentation at the Automotive Hall of Fame, of which he’s a board member.
“There’s so much uncertainty,” he says of the current automotive market. “Any time there’s that, it causes pause. It’s creating issues.”
He’s trying to keep up with it all. “I didn’t think I’d be a tariff expert,” he quips.
His take on tariffs: “The scary part about them is that they are inflationary by nature.”
That’s a pain point for the auto industry, what with the continued exacerbation of vehicle affordability. It’s been an issue for a while. But today the average new-vehicle transaction price is closing in on $50,000, according to Cox.
The auto market is bifurcated, Rowley notes. Price is no object for some affluent people. But it is an issue for the non-rich crowd. Tariffs can acutely affect them.
That’s because most small and entry-level vehicles sold in the U.S. are imports. Ironically, tariffs are expected to hit people with limited means the hardest.
“More consumers are being driven into the used-car marketplace,” says Jeremy Robb, senior director-economics and industry insight for Manheim Auctions, part of Cox Automotive. “Even a lot of people who can afford to buy new are saying, ‘I’m not spending $60,000 on a car.’”
Yet used cars are losing some of their affordability appeal.
Pre-owned vehicles priced under $20,000 have gone from nearly half of the market in 2019 to 11.5% this year, according to iSeeCars.com, an online marketplace.
After analyzing more than 2.6 million used cars, the company says the average 3-year-old car runs $32,635 – a $9,476 increase since 2019.
Yet, says Lori Wittman, president of Cox’s Retail Solutions, most car consumers have been actively purchasing.
Many of them need help, though, and “no one can guide people into a car they can afford more than dealers can,” she says. “Eighty percent of consumers expect to work with dealers.”
Meanwhile, advanced technology such as digital auto retailing continues to change the industry.
“Technology is front and center,” Rowley says.
Few consumers shop for a car without relying on the internet in some way. Digital retailing has led to faster and more profitable transactions for dealers, he says. “It comes down to using tools and technology, so folks are matching cars to their budgets.”
Then there is artificial intelligence, today's buzzword. Some people understand AI, and some don’t—at least not yet. Cox utilizes AI in about 60 of its product offerings.
“With AI, there’s the fear factor, the excitement factor and the education factor,” Rowley says. That’s typical of game-changing new technology through the ages.
Before taking the helm of Cox Automotive, Rowley spent 30 years in telecommunications.
Now, he leads an array of digital brands, such as Autotrader (inventory listings), Kelley Blue Book (pricing information), Dealer.com (website design and marketing), Dealertrack (finance and insurance), vAuto (inventory management) and Manheim, that runs both digital and physical auctions.
