High interest rates have, inevitably, caused a fall in demand for new vehicles resulting in car manufacturers having larger-than-expected vehicle inventories. To shift stock, dealers and manufacturers are using cashback and low-interest incentive programmes to motivate consumers to “buy more for less”. In this report, we highlight datasets that can be used to forecast the revenue of automotive manufacturers.

Overview

Excessive inventory volumes, large incentive programmes and reduced consumer demand can all result in lower revenue. Traditionally, investors may initially look to consensus estimate data to forecast auto industry KPIs such as revenue. Consensus estimate providers combine machine-learning and crowdsourced investor sentiment to provide investment managers with a benchmark for automotive company KPIs (e.g. sales volumes).

While consensus data can act as a useful benchmark for investors, this report outlines alternative data sources that can be used to outperform consensus benchmarks. The image below provides a high-level overview of the alt-data landscape for automotive investors. 

While the data products included in the graphic above are not directly comparable (e.g. LMC provides forecasts while cars.com provides web-scraped data), the image provides an overview of the landscape based on:

• Claimed investor client adoption
• Level of preparedness each provider is to service investors

Revenue segments

According to KPI guides for the auto manufacturing industry, there are three primary segments that drive automotive manufacturer revenue: 

• Automotive segment – sale of manufacturer vehicles
• Parts and services segment – sales of automotive parts and vehicle servicing
• Financials segment – lending and leasing vehicles to consumers

While the parts and services and financial segment are important revenue sources, the automotive segment continues to make up the largest share of OEM revenue. As such, this report piece will focus primarily on data sources that can be used for this segment.