New Vehicle Inventory Surges to 3.14 Million Units
In a notable development within the automotive industry, new vehicle inventory on dealer lots has reached an impressive 3.14 million units. This increase signals a positive trend, with inventory rising by approximately 90,000 units, or 2.9%, over the past two months. The data is drawn from ZeroSum's insightful monthly "State of the Dealer" report that captures the latest trends impacting dealers today.
Effects on Vehicle Pricing
The increase in new vehicle supply is starting to reshape both new and certified used vehicle pricing. For new vehicles, the average marketed price has decreased by over $300, indicating potential relief for buyers. Moreover, adjustments to market prices have begun to drop below the manufacturer's suggested retail price (MSRP) for the eighth month in a row, showing a growing trend of discounts and incentives being offered by dealerships.
Changes in Certified Used Vehicle Prices
The certified used vehicle market is also experiencing notable price adjustments. The average price for certified used vehicles has decreased significantly, sliding from $39,351 to $38,166 over the last two months, which equates to a drop of more than $1,000. This decline emphasizes the gradual softening observed in the used vehicle market.
Current Inventory Situation Analysis
Despite the positive inventory growth, levels still fall below historical norms, which typically hovered between 3.3 and 3.5 million units. However, as the inventory figures inch closer to these historical benchmarks, industry experts are keenly observing the implications for dealership operations.
Jeff Englishmen, Vice President of Dealer Success at ZeroSum, noted that during this period of recovery, vehicle counts have not returned to pre-pandemic levels. Englishmen stated, "While we are still not back to an oversupply situation, the recent acceleration of inventory growth is noteworthy. Dealers should remain vigilant about these broader market dynamics, as they play a crucial role when determining pricing strategies and managing inventory effectively."
Forecast for November Sales
Looking ahead, ZeroSum forecasts a contraction in both used and certified used vehicle sales volumes in November. Expected figures suggest that used vehicle sales may decrease from 1.27 million units in October to approximately 1.21 million in November. In the same vein, certified used vehicle sales are projected to drop from 168,000 to around 161,000 units.
Market Trends Observation
In maintaining a steady course, the used vehicle market has displayed consistent levels of both supply and demand over the past year. However, initial signs suggest that sales velocity may be weakening slightly, thus warranting close monitoring in the upcoming months.
Additional Insights from the Report
Insights from the report also highlight several valuable metrics of interest:
- New vehicle turn rates experienced slight stability, increasing from 36% in September to 37% in October.
- The days-to-move for new vehicles saw a small uptick, moving from 69 days to 70 days.
- Used vehicle turn rates improved marginally, rising from 64% to 65% from September to October.
- Days-to-move for used vehicles also increased, growing from 43 days in September to 44 days in October.
About ZeroSum
ZeroSum stands out as a leading automotive retail agency that specializes in top-tier, inventory-based digital marketing solutions tailored to the needs of dealerships. The "State of the Dealer" report is a premier resource for data on the new, used, and certified pre-owned automotive markets.
For those interested in deeper insights, ZeroSum provides continued access to a wealth of data and trends pertinent to the automotive sector, enhancing the efficiency of dealer marketing practices.
Frequently Asked Questions
What was the new vehicle inventory level reported?
The new vehicle inventory reached 3.14 million units in October, marking a 2.9% increase.
How have vehicle prices been affected?
The average marketed price for new vehicles has decreased by over $300 amid rising inventory levels.
What is the trend for certified used vehicle prices?
Certified used vehicle prices have dropped from $39,351 to approximately $38,166, a decline of over $1,000.
Are sales volumes expected to rise or fall in November?
Sales volumes for both used and certified used vehicles are expected to decrease in November.
What does the data suggest about dealer strategies?
Dealers should adapt their pricing strategies and inventory management based on broader market dynamics reflected in the report.
