New-vehicle inventory ended September at its highest level since early June 2021, and the average new-vehicle listing price fell to the lowest point in two months, analysis by Cox Automotive shows. inventory data available from vAuto. Yet supply remains well below historical norms and prices are still much higher than in the past.
to September 26, 2022
Average listing price
“Supply is improving but demand remains strong, so we still haven’t returned to inventory levels of past years,” said Charlie Chesbrough, senior economist at Cox Automotive. “Despite high vehicle prices, soaring interest rates and high inflation, we don’t see any signs of falling demand, at least not yet.”
Total U.S. supply of available unsold new vehicles stood at 1.32 million units toward the end of September, compared to 1.23 million overhauled vehicles at the end of August. Days supply increased slightly to 42 at the end of September, from a revised 41 at the end of August.
Supply at the end of the month was 54% higher, or 465,000 units, than at the end of September 2021. Day supply was 40% higher than the same period a year ago. Although this is a significant increase, inventory remains low by historical standards. At the end of September 2020, the offer amounted to 2.46 million vehicles for 57 days of supply. For the pre-pandemic 2019 period, the inventory reached 3.45 million vehicles for an 80-day supply.
At the end of September, the industry had an inventory of non-luxury vehicles totaling 1.12 million vehicles for a 42-day supply. That was up from 1.02 million a month earlier for a 40-day supply. Luxury supply stood at 199,975 vehicles for a 47-day supply, compared to a month earlier when inventory was just under 125,000 units for a 44-day supply.
Cox Automotive’s day supply is based on the daily sales rate for the most recent 30-day period, in this case ending September 26, when approximately 937,665 vehicles were sold. According to Kelley Blue Book calculations, new vehicle sales in September totaled 1.12 million units, up 10% from September 2021 but down slightly from August. September’s seasonally adjusted annual rate (SAAR) was 13.5 million, down from 12.3 million in September 2021, when the chip shortage was at its worst, and down from 13.1 million in August.
Asking prices for new vehicles begin to decline
The average listing price – or asking price – fell to $46,294 in September, from a revised $46,398 at the end of August and the lowest level since mid-July, according to Cox Automotive’s analysis of inventory data available from vAuto. Listing price is 7% ahead of a year ago and remains high compared to past years. As of September 2020, the average listing price was $38,662. In September 2019, before the pandemic, it was $37,110.
The average transaction price (ATP) — the price people paid — fell from record highs in September to $48,094, according to Kelley Blue Book, a Cox Automotive company. September prices were down 0.3% ($146) from August, but were up 6.1% ($2,775) year-over-year from September 2021. September marked a record 16e consecutive month of ATP being above the displayed price.
Incentives fell again in September to just 2.1% of the average transaction price, a record high. A year ago, incentives averaged 5.2% of ATP.
“If we see stocks building up quickly, we can expect increased incentive activity,” Chesbrough said. “Certain makes and models have higher inventory and could be among the first to offer incentives.”
Luxury vehicles represent a historically high share of new vehicle sales; this share was 18% in September. According to data from Cox Automotive, the average listing price for luxury vehicles was $65,935 at the end of August. The average non-luxury list price was $44,559 at the end of August. The average transaction price for non-luxury vehicles fell to $44,215 in September and $65,775 for luxury vehicles, according to Kelley Blue Book data.
Prices are expected to remain high due to continued strong demand, low inventories, record-high incentives and a rich array of vehicles being produced by automakers to boost profits and revenue. Automakers always prioritize computer chips available on high-margin, high-end models over entry-level vehicles.
Asian car brands still have the lowest supply of new vehicles
Asian non-luxury brands and Japanese and European luxury brands had the lowest inventory. The non-luxury brands with the lowest inventory were Kia, Toyota, Honda and Subaru. The luxury brands with the lowest inventory were Lexus, BMW, Acura and Land Rover.
Volvo had the highest stock of any brand, measured by days supply. Other luxury brands with above average inventory were Lincoln, Buick and Audi. Again, on the non-luxury side, Stellantis brands – Ram, Jeep and Dodge – had the highest inventory.
Besides low-volume high-performance cars, the segments with the lowest inventory were mostly very fuel-efficient cars, including subcompact, compact and midsize cars, hybrids and minivans. The demand for fuel-efficient vehicles is increasing as gasoline prices rise.
September Days Inventory Supply by Segment
Small cars remain tight, large pickups and crossovers have more availability
Full-size pickup trucks from domestic automakers had the highest inventory, returning to levels similar to pre-pandemic levels. As has been the case for months, larger and luxury cars also had inventory at the higher end of the spectrum.
Nearly half of the top 30 selling models in the 30 days ending Sept. 26 were Asian brands, primarily Kia, Toyota, Honda and Subaru. Kia Telluride was all the way down with a mere 16-day supply. Among the top 30 selling models, full-size domestic pickup trucks and SUVs had the most inventory.
In terms of price categories, the lower the price, the tighter the supply. Price categories below $30,000 had the lowest day supply at around 30 days. The $30,000-$40,000 segment, the largest volume category, had a 35 day supply. The $40,000 to $50,000 category had a 42-day supply. The most expensive categories had more than 50 days 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.