Inventories of unsold cars and light trucks have swollen to their highest levels since the recession while sales growth in the U.S. market has slowed significantly in the past five months. That combination could mean larger discounts and incentives and lower profit margins in 2014. According to Automotive News, all three domestic automakers started February with more than a 100-day supply of unsold vehicles. Industry-wide automakers had 88 days’ worth of vehicles at the start of February, the highest February inventories have been since 2009, when the industry was at its nadir.
Tag: days supply
|Automaker||Aug. 2013||Aug. 2012||Pct. chng.||8 month
|Ford Motor Co.||220,404||196,749||12%||1,703,220||1,510,614||13%|
|Jaguar Land Rover||6,661||4,756||40%||43,106||36,584||18%|
|Volvo Cars NA||5,518||6,319||–13%||44,005||46,649||–6%|
Riding on strong pickup truck and sedan sales, Chrysler Group and Ford Motor Co. both posted 12% overall sales increases from last August. It was Chrysler’s 41st straight year to year monthly increase. A number of manufacturers’ sales were constrained by tight inventory of models in high demand.
When the Buick Encore compact crossover was introduced, some questioned if it was the right vehicle for the brand, but apparently GM underestimated initial demand for the Encore.
After adding 600,000 units to its North American capacity within the past two years, Ford is trying to find ways to increase output of the Escape crossover and midsize Fusion, both of which currently have about 40 days supply. The Fusion is particularly in short supply on the east and west coasts, a good sign for any domestic automaker these days. A 60 day supply of cars in inventory is generally considered normal for the U.S. auto industry. Automotive News is reporting that at the Center for Automotive Research’s Management Briefing Seminars, held in Traverse City, Michigan, Ford VP for North America manufacturing, Jim Tetreault, said, “We’re still looking at how we get more out of every plant, and that’ll be a focus for as long as the demand is as strong as it is.”