Summer sales by auto manufacturers are putting a dent in inventories as the August supply tightened slightly from July, but year-over-year figures show that the industry still has more cars on its lots, a sign that it will remain a buyer’s market for the foreseeable future.
According to Automotive News, car companies had a 69-day supply of vehicles in hand, down from the July 1 total of 74 days, but 8 days more worth than a year ago. Days’ supply is the number of days it would take to exhaust all the vehicles in stock at the current sales rate. While automakers are saying that they are being more disciplined by curtailing fleet sales, they have yet to significantly cut production in order to bring the supply of cars in line with current demand. Over the first seven months of 2017, 10,124,580 vehicles have been produced in North America, versus 10,282,148 a year ago—that 160,000 or so vehicle difference amounts to just 1 percent of output in a year that will see somewhere between 16 and 17 million vehicles sold.
GM is one of the culprits, admitting that it is stockpiling vehicles for later in the year when a number of plants go down for extended periods for retooling. It has actually built 40,000 more vehicles to date than this time last year. The auto giant has a 104-day supply of vehicles on hand, second only to Mitsubishi’s 110-day supply. The leanest manufacturer is Subaru with just a 40-day supply matched by Audi. BMW has a 45-day supply and Mercedes a 47-day supply.
Acura, which is announcing a refreshed 2018 RLX sedan at Pebble Beach this weekend, could probably use the help with its flagship sedan. Even though the inventory is just 1,000 vehicles, at the current rate it is selling, it will take 391 days to close out the 2017 run. That works out to sales of just three RLX models per day. In comparison, Acura has 10,000 TLX models in stock, which works out to a 100-day supply. The Buick LaCrosse isn’t faring much better than RLX. There are 13,300 available now, which works out to a 323-day supply at the current turnover. There’s also a 203-day supply of the Regal, while the Buick brand overall, has a 243-day inventory.
It’s interesting that for the moment, there aren’t hefty incentives on the LaCrosse, which has a $500 rebate, while Buick has up to $2,000 on three of its crossover SUVs, the outgoing 2017 Enclave, the subcompact Encore and China-built Envision. Even the compact Verano sedan, which is going out of production, has more money on it in the form of a $1,500 rebate.
Chevrolet’s midsize Malibu is also in ample supply with 64,700 on the ground. That 153-day supply is more than double the industry average and also may explain why there’s up to $3,500 in rebates available on 2017 models.
2018 model rebates
While supplies grow and sales lag, we are beginning to see rebates appear on newly introduce 2018 models, well ahead of the Labor Day and model year closeout sales. BMW is offering up to $2,000 on 2018 430, 430 Gran Coupe, 440, 440 Gran Coupe and M4 models. Alfa Romeo’s new 2018 Stelvio has subsidized loan rates ranging from 1.9 to 5.9 percent, while a wide range of2018 Audi models, from the A3 eTron up through the S8 sedan have finance rates ranging from 0 to 9.8-percent. Also carrying low interest rate programs on 2018 vehicles are Mazda (CX-3, Mazda3), Jaguar (XE), Acura (RDX and TLX), Infiniti (Q50, QX30), Subaru (all models) and VW (Atlas, Tiguan).
As for cash back, the pickup truck wars are going full bore with the 2018 Ford F-150 eligible for $1,500 while the 2018 Chevrolet Silverado and GMC Sierra have up to $2,000 on them. Hyundai is offering up to $1,500 on 2018 versions of the Santa Fe Sport, Elantra, facelifted Sonata, while Kia has up to $1,000 on new Optima, Sorento and Sportage models.
2018 Chevy Tahoe Custom, Tiguan Limited bow
A value edition of Chevy’s full-size SUV has been introduced in the form of the 2018 Chevrolet Tahoe Custom. The trim level starts at $44,995 and comes standard with a 6,600-pound towing capacity, a 355-horsepower 5.3-liter V8 engine and up to 112 cubic feet of cargo space. Based on the entry level LS trim, the Custom represents more than $3,500 in savings. That lower sticker is the result of using 18-inch painted aluminum wheels in place of similar-size alloys and deleting the third row seating. Still, there are plenty of features left including Apple CarPlay and Android Auto compatibility, 8-inch touchscreen radio, rear vision camera, remote start and 4G LTE connectivity.
“The Tahoe Custom is a response to strong customer demand for Tahoe, as well as the full-size SUV segment moving upmarket,” said Sandor Piszar, Chevrolet Trucks marketing director. “In the past five years, the average transaction price for the segment has climbed, fueled by customer appetite for features like heated and cooled seats, adaptive cruise control and a head-up display. This created an unmet need I the marketplace for customers who want the cargo and towing capability of a full-size SUV to go camping, boating or off-roading, but don’t necessarily want all of the option content offered on a Tahoe Premiere.”
Meanwhile, VW has reintroduced the previous generation German-built Tiguan as the 2018 Volkswagen Tiguan Limited, which retains its current configuration with less content and a price below last year’s entry level model as well as the pricier new Mexican-built Tiguan, which is all-new for 2018. Offered in just one trim level, the front-drive Tiguan Limited starts at $21,995 and has 16-inch steel wheels, cloth upholstery and a review camera. VW’s 4Motion all-wheel drive is $1,975 extra and the step up to 17-inch alloy wheels is $495. A $1,295 Premium Package upgrades the infotainment system and includes Apple Car Play and Android Auto compatibility. Destination is $865. The 2017 VW Tiguan opened at $24,995, while the 2018 model is priced from $25,345 and offers an optional third row.
Certified Bugattis
Even in the rarified world of cars like the Bugatti Veyron, official factory certification seems to convey value. During the Monterey Car Week, the maker of these exclusive multi-million dollar supercars said it was adding to its factory certified program by extending its optional 10-year extended warranty by another five years to customers who have purchased the program. Only 450 Bugatti Veyron models were built by the company, which is currently marketing its replacement, the $3 million Bugatti Chiron.
The rundown
Check out the This Week in Car Buying Podcast here.
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