Optimism is down and pessimism is up among U.S. franchised dealers — as well as manufacturers and suppliers — in Automotive News’s latest quarterly Auto Industry Confidence Index.

Retailers’ scores fell from 57.1 in the fourth quarter of 2025 to 54.5 in Q1 2026, contributing to an overall decline from 58 to 55.6. Factory executives registered the largest decline, from 58.2 to 54.5. Eleven percent of franchised dealers are “very pessimistic” about the next six months, outpacing suppliers (7%) and manufacturers (6%).

Analysts blame high prices and the nearly two-month U.S.-Israel war with Iran.

“Overall pessimism jumped to 53 percent from 46 percent last time, while optimism dropped to 22 percent from 32 percent,” states a release announcing the report. “When asked what makes them optimistic over the next six months, the top answer for every group was ‘nothing.’”

Last month, Cox Automotive’s Q1 Dealer Sentiment Index report found 56% of surveyed dealers were optimistic heading into the spring selling season.

Read the full report at Automotive News