Dealers say the auto market is strong and expect it to remain so in the near term, but their profitability is constrained by market conditions and competition, a Cox Automotive survey designed to gauge dealer sentiment found.

The newly launched Cox Automotive Dealer Sentiment Index, released today, is the equivalent of a consumer confidence index, showing how U.S. dealers feel about the current automotive market and prospects for the next 90 days. It also identifies which factors are most significant in driving dealers’ optimism or pessimism, as well as variations by region. Automotive News is the first publication to carry the survey’s results.

The index measures dealer perceptions of current retail auto sales and sales expectations for the next three months as “strong,” “average” or “weak.” The responses are used to calculate what’s known as a diffusion index, where any number over 50 indicates that dealers view conditions as strong, rather than weak.

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