A look at last month’s new vehicle market reveals a three-part story: steady inventory, accelerated sales, and tighter days’ supply.
Steady Inventory
According to data from Kelley Blue Book parent Cox Automotive, the total inventory for May was 2.89 million, up slightly from April but about average for the year.
Accelerated Sales
Also up were the selling rate and listing price. The daily retail selling rate rose 6.5% from April and 9.6% year over year. The average listing price reached $49,307, up 1.2% year over year. May also marked the year’s strongest daily sales pace of the year.
Tighter Days’ Supply
The average days’ supply fell to 76 in May, down from a high of 96 in February, when weather-related issues affected the industry.
From a brand perspective, days’ supply ranged from 34 to 148. One brand’s day supply will fall due to accelerated sales, while another will grow due to lower demand. Stellantis, for example, had four brands with higher supply levels (Chrysler at 129, Ram at 144, Jeep at 145, and Dodge at 148). For those car shopping, the more inventory on hand could mean more room to negotiate a deal.
On the flip side, Toyota and Lexus had the lowest days’ supply with 34 each, followed by Honda at 46.
Rising Incentives
Incentives rose to 7.1% of the average transaction price (ATP) in May. “Incentives are helping sustain demand while pricing strength remains concentrated in high-volume segments such as midsize SUVs, compact SUVs, and full-size pickups,” according to Cox Automotive Executive Analyst Erin Keating.
Pricing
Average transaction prices fell 0.5% from April and were up 1.2% from the previous year, sitting at $49,220. MSRP (manufacturers’ suggested retail price) growth is 1.6% year over year. What this tells us is that pricing isn’t necessarily higher, but financing costs and household budget constraints still make affordability challenging.
