Car dealers have more cars to sell this month than they did last month. The last time we could say that was in February. America’s car dealers ended October with 969,464 new vehicles in stock, according to Kelley Blue Book parent company Cox Automotive – up from 885,773 at the end of September.
So, is the new car shortage starting to end?
In a word, no. October’s number is still just 36% of what dealers had in stock one year ago – and supplies were considered low at that point.
If This is a Recovery, It Will Be a Long One
But the numbers may signal that good news is coming eventually for car shoppers. “The higher inventory suggests the worst of the inventory shortage caused production cuts due to the global computer chip crisis may be over, or, at the very least, not worsening,” said Cox Automotive Senior Economist Charlie Chesbrough.
But “we expect prices to remain high until the inventory pipeline is refilled, which may take another year to return to more normal levels,” Chesbrough says. Further shocks to supply chains could prevent even that slow recovery from happening.
Sticker Prices are High, and Most Buyers are Paying More than Sticker
Low inventories have driven sticker prices high and the actual prices people pay for new cars even higher.
The average listing price for a new vehicle heading into November was $44,680 – itself a record high. But, with nearly every buyer paying above sticker price, the average transaction price for a new car sat at $46,036.
Low supplies mean dealers lack the leftover models they are typically discounting at this time of year, hoping to move them out to make room for new model year cars. Discounts on new cars are at a 20-year low, with dealers confident they can find a buyer for nearly any car at or above MSRP.
Some Brands Have Much Lower Inventory Than Others
The story isn’t the same at every dealership, however.
The auto industry typically measures their stock of new cars with a metric they call days of inventory – how long it would take automakers to sell out of new cars at today’s sales pace if they didn’t build more.
Honda and Kia dealers ended October with just 17 days’ supply. Toyota and Subaru weren’t far behind, at 19 and 20.
But Chrysler dealers had 98 days’ worth of inventory in stock. Alfa Romeo dealers had 72, and Ram dealers 64.
Among luxury automakers, Acura had the lowest supply, at just 24 days. Infiniti had the largest supply, at 51.
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November 19, 2021 at 10:46PM
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Is the Car Shortage Starting to Ease? - Kelley Blue Book
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