New vehicle inventory is slowly creeping up to the 3 million mark

Author

Anna del Villar
June 14, 2024

New car supply rose in May as inventory continues to recuperate, but pre-pandemic levels are still a little ways off. 

Driving the news: At the start of June, new car supply reached 2.89 million units. This was 50,000 more than at the start of May, according to new data from Cox Auto. 

  • Year-over-year, inventory is up by nearly 1 million vehicles. 

  • Fueled by a strong close to May (Memorial Day is typically a big selling day for dealers), the industry average of days’ supply declined 4 days month-over-month to 74.

Why it matters: Model year 2025 vehicles are starting to fill up dealer lots, yet a good chunk of 2023s are still outstaying their welcome. Incentives and discounts are likely to stay and may even increase. This is especially true given the Fed’s latest (and widely expected) decision to leave interest rates unchanged. 

Zooming in: All Stellantis brands continue to struggle with some of the highest inventory levels nationwide. 

  • Chrysler, Dodge, Jeep, and Ram all had well over a 100 day’s supply. Ram, in particular, had more than double the industry average. 

  • At the other end of the spectrum, Toyota, Honda, and Lexus had inventory levels of nearly half the national average. Toyota has the lowest days’ supply at 31. 

Surprisingly, Buick remains one of the most affordable brands on the market, Cox notes. The brand has an average listing price of $32,689 and a decent amount of model year 2023 ripe for discounts. 

What they’re saying: Ford CFO John Lawler recently spoke during the Deutsche Bank 2024 Global Auto Industry Conference stating, “It worries me that the stocks are building. We haven't seen that impact so far, but we are watching it very closely."

General Motors CFO Paul Jacobson is also keeping a sharp eye on things and just this week, lowered the expected production for EVs in 2024.

Bottom line: These conditions are largely a positive outlook for dealers (depending on brand) and consumers. More generous incentives from OEMs are giving some dealers the boost they need to move aging metal. At the same time, discounts are driving down average listing prices.

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