By on June 17, 2019

Due to weakening new-vehicle sales, the United States was staring down the barrel of near-record inventories a couple of months ago. Encouraged by the factory to ensure their lots were filled with the latest wares, dealers have watched their margins evaporate as employees and customers drowned in the sea of metal parked out front.

While still uncomfortably high, U.S. inventories started creeping back down in May. By the end of the month, the number of vehicles waiting to be adopted fell below 4 million for the first time since the beginning of 2019. 

Dealers and automakers opened June with an estimated 3,992,100 vehicles at the ready, according to figures compiled by Automotive News. The 65-day supply is reportedly on par with last year’s figures and represent a marked improvement over the 78 days from last April.

From Automotive News:

Automakers and dealers opened June with an estimated 1,022,500 unsold cars, a 59-day supply that represents about 26 percent of total inventory.

No automaker or brand had less than a month’s supply of inventory, with Subaru again running the leanest levels.

Meanwhile, a pair of Fiat Chrysler Automobiles vehicles marked the opposite ends of the inventory spectrum on June 1: Dealers had just a 10-day supply of the Dodge Grand Caravan but an industry-worst 254-day supply of the Fiat 500L.

Despite appearing to have put on its blinker to turn the corner, the U.S. is still coping with sizable inventory bloat. While many are making direct comparisons to the build up of new vehicles that foreshadowed the Great Recession, the reality is that most automakers are doing substantially better at present. Unfortunately, we doubt that has provided much comfort to the dealerships that are taking this on the chin. Lackluster sales, factories shying away from incentives, and rising interest rates aren’t doing them any favors.

 

[Image: Bell Ka Pang/Shutterstock]

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16 Comments on “Bloated Auto Inventories Deflate Slightly...”


  • avatar
    eggsalad

    I remain fascinated that 8 model years later, offering an essentially unchanged car, FIAT expects to sell any 500s at all. And for the few folks left who actually want one, they depreciate like a stone, so why not buy a 3-year-old version for half price?

    • 0 avatar
      SCE to AUX

      Agreed. I occasionally consider getting a 500 as a runabout. Lightly used ones are dirt cheap. You’d think they were EVs.

    • 0 avatar
      Lorenzo

      The slow seller is the 500L, not the regular 500.

      The 500L is the 4-door hatch with a shiftable 6-speed automatic. It has the turbo 1.4, so it’s bigger, more comfortable and faster than the standard 500. And still doesn’t sell.

      They’re not selling because you can get a Jeep Renegade, the same platform, with the same engine, but with a 6-speed manual and AWD. But the big thing is, you’re driving a Jeep, not a Fiat.

      • 0 avatar
        tsoden

        The 500 “X” is the same platform as the Jeep Renegade. The 500L I am quite certain is a totally different platform.

        • 0 avatar
          bullnuke

          Regardless of the plastic emblems affixed to various locations on the vehicle and which platform underpins it, you are still driving a Fiat engineered and built to Fiat standards (?) product.

    • 0 avatar
      dividebytube

      Two weeks ago my wife’s 2003 MINI finally gave up the ghost. She wanted a Fiat 500 Abarth but conceded the car was too small for our teenage son, a 55 pound dog, and 200 pound me. So we thought about getting a manual 500X – wow are those things ever cheap – and even considered the 500L (even cheaper!).

      Long story short – we saved a bit of money by getting a 2008 Infiniti M35x with 107k miles and a documented maintenance history. Now that has enough legroom for the whole family.

    • 0 avatar

      ” so why not buy a 3-year-old version for half price?”

      Because that’s too expensive for that impractical (clown) car.

  • avatar
    sirwired

    Now that Sergio’s gone, what’s the chance FCA just nixes the Fiat brand in the US, and sends customers to the nearest other dealership for service?

    • 0 avatar
      Lorenzo

      They’ll have to keep the parts supply going for years, but don’t have to sell Fiats after the stocks are gone. The Jeep Renegade uses many of the same parts, so it shouldn’t be too hard. The Compass is on a modified Renegade platform, and the Renegade is a modified 500L platform. Parts bin engineering assures that most of the mechanicals have replacement parts.

  • avatar
    DedBull

    What do experts think is an acceptable supply level for new vehicles on the lots? 4 million from an annual sale rate of 17+ million is approximately 20%.

    • 0 avatar
      highdesertcat

      The acceptable supply level varies from dealer to dealer, and region to region. Dealers in the larger cities have greater selection, lower overhead and fixed costs, higher sales volume and faster access to the profit resulting from a sale.

      Ultimately it is the buyer who decides if “The Price Is Right”, or walks away to deal another day, another way.

      The best time to buy is actually NOW, when factory incentives are high, selection is still decent, and MY 2020 production will be started in August, with first deliveries in late Sept/Oct.

      But with all the political bickering going on in America, a lot of would-be buyers have lost their taste for even more adversarial confrontation with a dealership and deferred their buying until 2020 models hit the showroom floor.

      This late in the year a dealer should not have 346 unsold 2019 and 2018 Silverado trucks on their lot, as an example. Yet some do. Others even more. The fact that there still are a number of unsold 2018 models on the lot also speaks volumes.

      One thing for sure, dealers are not going to lose money on sales. Their motivation is to part a buyer with as much of their money as the dealer can get away with.

  • avatar
    jkross22

    I wonder how many lots are full of unsold cars and trucks that won’t ever be sold and how much premium that adds to the MSRP of new cars that are leased or purchased.

    • 0 avatar
      quaquaqua

      Cars always get sold. They’ll always find someone willing to buy the car that’s been sitting there for 18 months. It might take a huge discount, but new cars always sell. Especially when used cars are priced obnoxiously high. Sorry, “certified pre-owned” cars.

      • 0 avatar
        PrincipalDan

        2007 Chrysler Crossfires were still in new dealer inventory in 2009, they even tried clearancing them on “Overstock.com” but they did eventually sell.

  • avatar
    sportyaccordy

    It feels like a different story with used inventory. On an impulse I went car shopping this weekend and all the abundant models I saw earlier in the year were hard to find. Maybe inventory swells seasonally…


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