New-vehicle inventory remained at the same level as it had been for months, according to Cox Automotive’s analysis of vAuto’s available inventory data, despite comments from some auto executives that the global shortage of computer chips is easing and vehicle production is resuming to normal levels.
as of May 30, 2022
Average listing price
As gasoline prices hit record highs, import inventories, especially of smaller, fuel-efficient models including hybrids, were among the lowest in the industry at the end of the month. of May. Meanwhile, inventories of full-size pickup trucks and large non-luxury SUVs were piling up, some at traditional levels. The average new-vehicle listing price rose again to $45,495, with prices expected to remain high at least through the fall.
Total U.S. supply of unsold new vehicles available stood at 1.13 million units at the end of May, about the same as the revised available supply at the end of April . Inventory has hovered in this range for months.
The supply available at the end of May was down 25% compared to the same period in 2021. In gross figures, at the opening of June, the supply of unsold new vehicles was around 380,000 vehicles less than the supply from a year ago and 1.7 million less than in 2020. .
“Percentage and volume variances are narrowing compared to a year ago, as it was June 2021 when production cuts caused by chip shortages began to reduce inventory and hurt sales,” said Charlie Chesbrough, senior economist at Cox Automotive. He cautioned, however, that this does not mean the new vehicle inventory situation has improved. Instead, it has been stuck around the 1.1-1.13 million territory for months, well below historic levels, with no end in sight.
The days supply of unsold new vehicles was 34 days at the start of June, down from the revised 36-day supply at the start of May. This is the same general day supply range since mid-January. Non-luxury inventory totaled 845,738 units entering in June for a 34-day supply. The deluxe supply amounts to 138,550 units for a 38-day supply.
Cox Automotive’s day supply is based on the daily sale rate for the most recent 30-day period, in this case, ending May 30. For the calendar month of May, new vehicle sales were down 30% from a year ago. In volume terms, new vehicle sales in May were down 11% from April. May’s seasonally adjusted annual rate of sales (SAR) was 12.7 million, down 25% from last year’s 16.9 million and down 13% from the pace of 14.5 million. April, which was the highest rate since January.
Tight supply and ongoing production challenges limit the growth in new vehicle sales that would typically occur as the year progresses. The number of vehicles canceled from automakers’ production schedules worldwide due to chip shortages has topped 2 million, according to the latest estimate from AutoForecast Solutions, a forecasting company that has tracked vehicle production since the start. of the shortage of chips..
Predictions and hopeful comments from some auto executives that things are getting back to normal have not materialized in new vehicle inventory numbers in the United States. The Volkswagen Group, noting that parts disruptions are easing, has resumed a three-shift operation at its main electric vehicle plant in Germany, which produces Volkswagen and Audi electric vehicles for the United States as well as the rest of the world. world. BMW and Mercedes-Benz say they have enough chips to produce at full capacity and are now filling a record order book.
Prices are rising again; should remain high throughout the fall
High demand and low inventory keep prices high and discounts low. Automakers continue to prioritize chips available for high-margin, high-end models over entry-level vehicles. Moreover, keeping prices high is a weak incentive. Incentive spending by manufacturers fell to an average of $1,164 in May, down 11.4% from April and 61.8% from a year ago.
The average listing price – or asking price – climbed again in May, closing the month at $45,495, up from the revised end-April price of $45,137. The asking price began to decline in mid-February, but began to rise slightly in April and continued through May. Listing price is 12% higher than May 2021. According to Cox Automotive data, the average listing price for luxury vehicles was $64,282 at the end of May. The average non-luxury list price rose slightly to $42,240.
The average transaction price — the price people paid — rose again in May. The average transaction price (ATP) rose to $47,138 in May, according to Kelley Blue Book, a Cox Automotive company. It was the second highest ATP on record, behind December 2021 when it was $47,202. May ATP increased 1%, or $472, from April and 13.5%, or $5,613, from May 2021. The average price paid for a new vehicle in the United States on last month was the second highest on record, behind only December 2021.
“The growth in asking prices for new vehicles remains at nearly 12%, with only slight declines in recent weeks. This contrasts with declining used vehicle asking prices,” Chesbrough said. “The new prices may be more ‘sticky’ due to the limited supply, and a drop in growth will not occur for a few more months yet. It may also be that the price change has not yet been completed for new vehicles. Automakers’ focus on premium products, coupled with the introduction of new model year vehicles in the coming months, could keep this price growth higher for longer.
Small vehicles have low inventory; refueling building for large vehicles
Soaring gasoline prices also appear to be having an impact on vehicle inventory. Among vehicle segments, compact cars had the lowest inventory after low-volume high-performance cars. Hybrids, midsize cars, minivans and compact SUVs were also at the bottom of the scale. The daily supply of electric vehicles is well above average, but low and uneven sales volumes of electric vehicles impact the daily supply measure, as seen with high-performance cars. Our analysts believe that demand for electric vehicles remains healthy and electric vehicles are not gathering dust on dealer lots.
Inventory supply days by segment
In contrast, as usual, the segments with the highest inventories were luxury cars and larger cars, but also large non-luxury SUVs and full-size pickup trucks, all of which are gas guzzlers. Ram full-size pickup inventory stood at 70 days’ supply at the end of May, approaching more traditional levels.
Imports dominated the brands with the lowest inventories. In the non-luxury category, the least supplied brands are Asian imports: Kia, Honda, Toyota, Subaru and Nissan. The luxury brands with the lowest inventories were Land Rover, Porsche, Lexus, BMW and Acura. The brands with the highest inventory were mostly national brands and mostly Stellantis brands. The non-luxury brands with the highest inventories were Ram, Dodge, Jeep and Chrysler. The top luxury brands were Volvo, Audi, Buick, Cadillac and Infiniti.
Of the 30 best-selling models, which account for the bulk of vehicle sales in the United States, the 14 models with the lowest inventory were from Asian automakers: Toyota Corolla, Honda Accord, Toyota RAV4, Kia Forte and Toyota camry. Among the top 30 selling models, full-size trucks, including the Ram 1500, Chevrolet Silverado and Ford F-150, had the highest inventory. The Ford Escape and Ford Explorer SUVs were also at the top end.
In terms of price categories, the lower the price, generally, the lower the supply. Price categories below $40,000 had less than 30 days supply. Other price segments had a 36 to 46 day supply.
More information is available from Cox Automotive on New Vehicle Inventory, using a 30-day sales methodology to calculate day supply.
Michelle Krebs is an executive analyst at Cox Automotive.