But Kia, Toyota, Honda: nearly nothing on the lot. Where the shortages are, and where ample supply is, by brand and segment.
By Wolf Richter for WOLF STREET.
At the end of August, inventories of new vehicles on dealer lots and in transit ticked up to 1.23 million vehicles, still at the woefully low levels that have prevailed since the spring of 2021, down by 65% from August 2019.
But increasingly, there is now a new wrinkle in these shortages, according to inventory data from Cox Automotive: Many fuel-efficient models have essentially vanished from inventories, and there are long waiting lists for many of those models, and customers wait for months to get what they ordered, including EVs and hybrids and compact cars, while inventories of pickup trucks and other larger vehicles are building, and some brands, such as Ram and Dodge, are now overstocked and are offering massive discounts.
In terms of days’ supply at the end of August, it ticked up to 40 days, from 37 days in July. This is still very low, but up from the 30-day range last summer. By comparison, in 2019, supply averaged 89 days, and that was on the high side, and there were lots of deals to be had.
The chip shortages persist, but to a lesser extent.
Monday evening, Ford announced that it expects to have 40,000 to 45,000 unfinished vehicles on storage lots at the end of Q3, waiting for parts.
Since last year, automakers have been building vehicles that were missing components in order to keep their plants operating. When the missing components arrive, automakers install them, complete the vehicles, and ship them to dealers.
GM, at the end of Q2, had 95,000 unfinished vehicles on storage lots, waiting for components. Other automakers are also doing this to mitigate the effects of the chip shortages.
Shortages are concentrated in specialized cheap microcontrollers and semiconductors that the auto industry uses for mundane things. If one of the chips in a rear-view mirror is in short supply, the component maker cannot deliver the rear-view mirrors to the assembly plant, and the vehicle cannot be completed. But it can be built, and put on a storage lot, and when the rear-view mirror arrives, the vehicle can be completed.
Where are the shortages, and where is the ample supply?
As a result of the gasoline price spike this year, the most fuel-efficient vehicles have essentially vanished from dealer inventories. When you see “20 days’ supply,” you will find nearly nothing on the lot of many dealers, and most of the vehicles showing in “inventory” are actually in transit, and many of them have already been sold before they arrive on the lot.
The seven segments with big shortages. Seven of 23 major segments have between 20 and 30 days’ supply. This means that most of these vehicles in “inventory” are either in transit or have already been pre-sold. When customers show up to shop for one of these models, they will often be confronted with nothing to choose from, and they may have to order instead.
One of these seven segments is an outlier in terms of fuel efficiency: High-performance cars (22.2 days’ supply). But with an average price of $110,000, they’re not exactly mass-market vehicles.
These are the segments with shortages – and they’re frustrating for all involved, customers, dealers, and automakers. This data was provided by Cox Automotive.
|Overall Rank||Segments with the biggest shortages||Days’ Supply|
|3||High Performance Car||22.2|
The nine segments with tight to adequate inventories. In this group, you’ll find a broad range of vehicles, and including lots of SUVs and crossovers. Midsize pickup trucks are in this segment, but not full-size pickup trucks:
|Overall Rank||Segment with tight to adequate supply||Days’ Supply|
|8||Luxury Full-size SUV/Crossover||30.6|
|10||Mid-size Pickup Truck||36.3|
|12||Entry-level Luxury Car||40.7|
|13||Luxury Mid-size SUV/Crossover||40.9|
The five segments with plenty of supply, including full-size pickup trucks. For retail buyers, full-size pickup trucks are the most popular vehicles. The best-selling models of all times are full-size pickup trucks. This is a huge and stunningly profitable segment of the auto industry – and has been for many years.
During the pandemic, people headed to their dealers to buy pickups, and they cleaned out the dealers, and they ordered trucks and they waited for months, and some dealers sold trucks at $10,000 or $20,000 over MSRP and got away with it.
And automakers, hobbled by semiconductor shortages, prioritized building high-end pickups to protect their revenues the best they could while unit production was slowed by component shortages.
But then the price of gasoline spiked and hit the pain threshold, and consumers winced and took a deep breath, while automakers were still prioritizing the production of full-size high-end pickups. With supply chains being long and global and complicated and cumbersome, sudden changes in demand cannot be quickly accommodated.
And now pickup trucks are starting to pile up. On average, there was 59.2 days supply of pickups at the end of August, topped off by the Ram 1500 with 88 days’ supply and the Chevy Silverado with 77 days’ supply – meaning oversupply:
|Overall Rank||Segment||Days’ Supply|
|19||Luxury Compact SUV/Crossover||54.6|
|20||Luxury Subcompact SUV/Crossover||56.0|
|21||Full-size Pickup Truck||59.2|
|22||High-end Luxury Car||60.2|
With some brands, big discounts are back.
For example, Ram dealers are now heavily discounting, including national and regional incentives from Stellantis. It’s as if they attached a minus-sign in front of the $10,000 addendum stickers of yore.
A San Francisco Bay Area Ram dealer, for example, advertised today a new 2022 RAM 1500 Big Horn Crew Cab 4X4 truck at $8,479 below MSRP:
Shortages among import brands, lots of supply among US brands.
The top six brands with the tightest supply – between 19 days and 30 days – are all Asian import brands.
This ranking goes by “brand,” not by the location where the vehicles are actually manufactured, which could be in the US, Mexico, Asia, Europe, etc. Many of these vehicles in the top are made at assembly plants in the US and Mexico.
Kia is on top with 19 days supply. Good luck walking into a Kia dealership, picking out a new vehicle, and driving home with it. Folks can order one. The US brands are from the middle on down, starting with Chevrolet at 43.9 days supply. The brands of Stellantis (red) are all overstocked.
Tesla doesn’t have dealers – and therefore doesn’t have inventory at “dealers.” It sells direct to consumers. And it doesn’t disclose its own inventory. And it doesn’t even disclose its sales in the US. So it’s not on the list.
At the bottom of the list with the most over-supply: Fiat and Alfa Romeo have minuscule sales in the US and don’t really matter. But Volvo matters – owned by Chinese automaker Geely, some of its models are made in China – and it is even more overstocked than Ram.
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