America’s car dealers stocked up on new cars to sell over the last few months as a strike by the United Auto Workers (UAW) union appeared inevitable. With the strike now likely over, they find themselves sitting on a better-than-expected inventory.
Kelley Blue Book parent company Cox Automotive reports a total nationwide inventory of about 2.4 million new cars for sale. That amounts to a 67-day supply at the average dealership.
Strike Played Out in Shoppers’ Favor
A strike has to create economic pressure on employers to work. Traditionally, UAW strikes have done that by restricting the supply of new cars and forcing prices higher.
But the union, this time, adopted an unusual tactic that kept that from happening.
Workers walked off the job at just a handful of plants at first, adding more periodically as negotiations dragged on. The tactic was likely designed to protect workers’ finances. But it also benefitted car shoppers, as most factories kept churning out cars even though the union was on strike against every major Detroit-based automaker.
Discounts Likely
An old auto industry rule-of-thumb tells dealerships to maintain about a 60-day supply. At that level, veteran dealers say, your local dealership likely has a vehicle in the combination of color and features that appeals to you.
A 67-day average means some dealers are slightly oversupplied.
Sales, meanwhile, are slowing. “Market headwinds from high interest rates and high prices are muting sales,” explains Cox Automotive Senior Economist Charlie Chesbrough. “As we enter the holiday sales season, greater discounting from the automakers seems likely. Otherwise, the days of supply will rise even further.”
Some Dealerships Better Supplied Than Others
Shoppers are more likely to see discounts at some brands than others. Stellantis, the parent company of Dodge, Jeep, Ram, and other brands, has a sizeable glut of new cars to sell.
Dodge dealers lead the industry with a jaw-dropping 186-day supply of new cars. Chrysler, Ram, and Jeep are over 120 — more than double the traditional industry guideline.
Some popular imported brands sit at the other end of the scale. On average, Toyota dealers have just a 33-day supply and little motivation to offer discounts. Honda dealers have just 38 days, and Kia 43.
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Some Models Overstocked, Others Not
Of the top-selling 30 models, large trucks from the Detroit automakers had the largest supply entering November. Specifically, the Ram 1500, Chevrolet Silverado, and Ford F-150 took top spots for high supply, which is normal for the industry.
Of top sellers, small cars and crossovers had the lowest supply, with the Toyota Corolla Cross at the bottom with a skimpy 19-day supply. Other models at the low end included the new Toyota Grand Highlander, Honda CR-V Hybrid, and Toyota Corolla. The new Chevrolet Trax was also at the low end.
