Compact vehicle inventory remains tight, with fuel-efficient compact cars at a 36-day supply and compact SUVs at 44 days.
Tighter supply stems from manufacturers shifting production to more profitable SUVs and large pickups, which has lifted transaction prices by $172 per vehicle and helped offset losses from lower sales volume, according to a new JD Power report.
Driving the news: JD Power reported retail sales through August were down from 9.2 million in 2025 to 8.8 million this year, just 11,000 off its 2026 forecast.
Looking at the mix in vehicle deliveries, compact SUVs saw the largest drop in share.
Conversely, midsize SUVs and large pickups saw the largest share gains.
Supply falls for smaller vehicles: Since the start of the year, the compact car supply has fallen from 52 days to 36 in August.
Similarly, compact SUV supply has dropped from 54 days to 44, and small SUV supply from 66 days to 54.
Compact vehicle share, according to Tyson Jominy, senior vice president of OEM customer success at JD Power, has jumped from 6.2% last year to 7.3% this year.
“Compact cars have always been a fairly tough sell, in particular for domestics but also in general. Small cars, small margins, always make it a challenge,” Jominy told CDG News. “The way automakers got around that or found a way to profitably do it was to assemble vehicles in Mexico and bring them into the U.S. […] Tariffs have really complicated the situation. So right at the exact moment when consumers are perhaps for the first time since 2016 going, ‘Hey, maybe I would like to get a car,’ is the exact moment when we have the tariffs in place, which makes it even more prohibitively expensive for manufacturers to participate in that part of the market.”
Sub-compact SUVs present value: Jominy points out that demand may prompt some manufacturers to look again at the profitability of compact vehicles.
He did also note the success of sub-compact SUVs, such as the Chevrolet Trax and Ford Bronco Sport, as the segment held a 13% retail share in September.
Jominy added that the category builds loyalty to brands at a rate similar to pickup trucks, somewhere in the 60% range.
“The vehicles are really that good, and consumers are sticking with the brand,” Jominy said.
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Bottom line: The current inventory mix, with limited traditional compact vehicles hitting the market, helped bring the new-vehicle industry's transaction prices up to $46,400 (from $45,500) and add $1.4 billion in consumer expenditure to offset some volume losses.
Jominy said the sub-compact SUV may be an opportunity for first-time buyers in the new market for dealers to build customer loyalty and offer an economic choice.
“[Consumers] have lost the ability to buy a small car, but in its place, there’s actually a segment that the industry has substituted that can meet most consumers’ expectations, and the reality is the upcharge is very minimal to go from a compact car to a sub-compact SUV,” Jominy said.
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