GPI - Higher prices spark the auto retailer sector

Cox Automotive says tight inventory of automobiles in the U.S. is not noticeably impacting sales, particularly on the used-vehicle side. "In fact, the monthly retail used-vehicle sales pace – apart from two dismal months in spring 2020 – has been remarkably consistent since early 2019. The only shift has been the big jump in average listing prices," notes the firm. The chart below from Cox Automotive indicates a strong pricing trend right through the end of May. Auto industry inventory hit a record low near the end of May, down 43% from the 2020 level and off 54% from the 2019 level, in a trend that may take months to reverse. Auto retailer stocks are seeing strong year-to-date returns, led by AutoNation (AN) +35%, America's Car-Mart (CRMT) +34%, Penske Auto Group (PAG) +32%, CarMax (KMX) +26%, Asbury Automotive Group (ABG) +19% and Group 1 Automotive (GPI) +18%. What to watch:

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Higher prices spark the auto retailer sector