Vehicle inventories are now approaching the highest levels seen since the summer of 2020. This is according to a report from Cox Automotive, which stated that the month of February opened with the industry seeing an average new vehicle supply of 80 days. However, the figure still doesn’t match the supply averages seen at the start of 2020.
The United States reportedly hit the 80-day mark (representing a 38 percent increase from the same time a year ago) at the very end of January. Vehicle pricing also dropped slightly, though presumably not enough to send anyone running out the door to buy a new automobile due to how outrageously high they’ve been over the last several years. But that might change in a few months if the current trend continues.
From Cox Automotive:
The average new-vehicle listing price opened February at $47,142, down 1 [percent] from a year ago. The average listing price rose throughout December 2023 and started January high, but prices began declining in the second week of January and have been dropping by almost 1 [percent] a week.
The U.S. new-vehicle average transaction price in January was $47,401, down nearly 4 [percent] from a year ago and down almost 3 [percent] from December 2023, according to Kelley Blue Book. (The month of December, when luxury vehicle sales typically surge, often sees a jump in average transaction prices.) Discounts and incentives in January averaged 5.7 [percent] of ATP, up from 5.5 [percent] in December and nearly 100 [percent] higher than a year ago.
Unfortunately, most Americans likely don’t have the money to buy a new vehicle right now and anything they would buy might still be difficult to find. Having asked several car salesmen and visited numerous dealers myself this month, the big takeaway is that markdowns seem to be reserved on the big ticket items that aren’t selling like they used to. Many marquees seem to have a surplus of larger vehicles (mainly SUVs and full-size pickups) that have been loaded up with features and carry sizable sums on the window sticker. All-electric models also appear to be overcapacity on many lots.
But there does not appear to be a similar surplus of affordable models. This is likely the result of many brands deciding to discontinue smaller models in the previous decade. Due to the fact that larger vehicles tend to carry higher margins and superior profitability many automakers simply cut them from their lineup. However, the way in which U.S. regulators have tied emissions rules to vehicle footprints has also incentivized companies to build increasingly massive and expensive products over the years.
Data from Cox showcased which brands had the largest vehicle inventories, signaling that these were either nameplates that managed to produce a lot of vehicles and/or had a harder time selling them once they arrived. Perhaps due to an over-reliance on SUVs and large pickups, domestic brands tended to have the fullest dealerships. The same could be said of marquees that are presently undergoing an identity crisis as they attempt to shift their smaller lineups toward all-electric vehicles.
Dodge reportedly had the highest inventories of any make by a substantial margin. It was followed by Chrysler, Lincoln and Ram. Dealerships selling those brands had an average new vehicle supply exceeding 150 days.
Companies seeing the lowest inventories tended to be Japanese brands offering what customers have grown to expect and a handful of premium brands. Toyota had the lowest by far with a supply of just 38 days. It was followed by Honda, Lexus, Mazda, Land Rover, Cadillac, Kia, Porsche, Subaru and BMW. Those were also the only brands that managed to stay under the 80-day mark.
[Image: Gretchen Gunda Enger/Shutterstock]
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