Estimates from vAuto in mid-October suggest industry-wide, new-vehicle inventory in the U.S. was at 2.3 million units, up from 2.1 million in mid-September, when the strike began, and well above the estimate of 1.5 million for mid-October 2022.
Graphic: Cox Automotive
Amid economic and political uncertainty throughout October, new-vehicle sales remain remarkably stable, according to a forecast by Cox Automotive released Oct. 25.
New-vehicle sales volume in the U.S. is expected to rise nearly 4% compared to October 2022, a market that was in the early stages of recovery from severe product shortages.
The October seasonally adjusted annual rate (SAAR), or sales pace, is expected to finish near 15.8 million, up 1.1 million from last year’s pace and a slight gain over last month’s 15.7 million level. The sales strength continues to stand out, given the current economic climate and the fact average new-vehicle auto loans are flirting with 10%.
Background News: New Vehicle Supply Rises Despite UAW Strike
However, some of these sales gains and good news can be attributed to seasonal adjustments, as October has one less selling day than October 2022 and last month.
“Though there are many headwinds in the market today, new-vehicle sales continue to show gains over last year’s supply-constrained market," said Charlie Chesbrough, senior economist at Cox Automotive, in a news release. " Concerns about high interest rates, a potential economic recession, and the ongoing UAW strike are all likely holding back some potential vehicle buyers. However, there are still enough individuals and businesses with the need and ability to buy vehicles, which has helped sustain the sales recovery.”
New-Vehicle Inventory Levels Grow
A key driver of new-vehicle sales strength has been growing inventory levels across the industry. Despite the ongoing UAW strike slowing production across the major Detroit-based automakers, estimates from vAuto in mid-October suggest industry-wide, new-vehicle inventory in the U.S. was at 2.3 million units, up from 2.1 million in mid-September, when the strike began, and well above the estimate of 1.5 million for mid-October 2022. Days’ supply in mid-October reached 62, the highest point since the spring of 2021. A year ago, days’ supply was at 48.
Toyota and Honda continue to show the lowest measure of days’ supply, at under 23 days. Of the Detroit brands, where production is being hurt by the UAW strike, Chevrolet and Cadillac had the tightest supply in mid-October, both below the industry average of 62. Ford had 90 days’ supply in the same timeframe, while Lincoln and the core Stellantis brands had inventory levels well above 100 days’ supply.
“While the UAW strike is certainly slowing down production at select assembly plants across the U.S., the impact has not yet fully materialized for consumers in the showroom," Chesbrough said. "Compared to this point last year, industry inventory levels are much higher, which is helping support — to this point at least — relatively healthy new-vehicle sales.”
All percentages are based on raw volume, not daily selling rate. There were 25 selling days in October 2023, one less than September and one less than October 2022.
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