The number of new cars available for sale crashed to a historic low this summer, but it may finally be stabilizing.
Slightly Higher Inventories at Last
Automakers measure their supply of new cars with a metric they call days of inventory – how long it would take them to sell out at the current sales rate if they stopped building them today. At the end of June, the nationwide average stood at 29 days. At the end of July, Cox Automotive reports, it had climbed to 31. Cox Automotive is the parent company of Kelley Blue Book.
The total number of new cars available for sale stood at 1.2 million at the end of July. That was down from 1.3 million the month before. But the sales pace slowed ever so slightly, allowing the supply to stop a freefall that started last December.
Manufacturers have slowed production of many vehicles amid a worldwide microchip shortage. Car shoppers, meanwhile, have been lured back to showrooms by signs of an economic recovery and a new reluctance to take public transportation during an ongoing pandemic.
Not Necessarily Good News
The development isn’t necessarily good news for car shoppers, though. That sales rate is falling, in part, because shoppers are walking away from the market due to the high prices or because the short supply means they can’t find the car they want.
July’s seasonally adjusted sales rate – a figure that removes predictable seasonal fluctuations to make it easier to compare months – fell in July.
“The new-vehicle market is starting to show signs of stabilization around inventory levels,” said Cox Automotive Senior Economist Charlie Chesbrough. “The sales pace has been falling as supply is constrained and consumers wait for improvement. While the days’ supply is stabilizing – and, in fact, it rose slightly at the end of July – inventories remain tight and are far from normal.”
Situation Very Different for Some Brands
Some automakers have bigger supply issues than others. Kia, Honda, and Toyota tied for the tightest inventory at the end of July, at 20 days’ supply. At the other end of the scale, Alfa Romeo dealers had 105, Fiat dealers had 97, and Ram dealers had 65 (though overall brand numbers can be misleading, as the Ram 1500 pickup remains among the three best-selling vehicles in America).
Minivans the Hardest to Find
The vehicle in shortest supply was the Chevrolet Corvette Stingray. But Chevy’s halo car might best be considered an outlier. It has niche appeal, and Chevrolet has faced limited supplies of some parts for the Corvette all year. A better signpost of this market might be the vehicle with the second-lowest supply – Kia dealers had just 10 days supply of their new 2022 Carnival minivan.
Minivans saw the lowest inventory of any vehicle type. The biggest change came in compact cars. Though they have not sold nearly as well in 2021 as they did a decade ago, they are now the second hardest-to-find type of car, thanks to limited supplies of the Toyota Corolla and recently redesigned Honda Civic. SUVs and trucks have been in low supply throughout 2021, but their relative position improved in July.
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August 12, 2021 at 11:38PM
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New Car Inventory Stabilizes Slightly - Kelley Blue Book
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