{"id":203274,"date":"2021-06-07T10:00:36","date_gmt":"2021-06-07T14:00:36","guid":{"rendered":"https:\/\/www.thedetroitbureau.com\/?p=203274"},"modified":"2021-06-07T10:11:54","modified_gmt":"2021-06-07T14:11:54","slug":"new-vehicle-inventory-continue-steep-decline","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2021\/06\/new-vehicle-inventory-continue-steep-decline\/","title":{"rendered":"New Vehicle Inventory Continues Steep Decline"},"content":{"rendered":"\n

Stories of consumers snapping up new vehicles as soon as the car haulers drop them on dealer lots will continue circulating, as inventories of unsold vehicles are steadily dropping as shortages of semiconductors crimps production worldwide.  <\/p>\n\n\n\n

\"dealership
New vehicle inventories are now at an average of a 23-day supply, according to J.P. Morgan.<\/figcaption><\/figure><\/div>\n\n\n\n

A new report by analysts at J.P. Morgan now estimate dealers across the United States are sitting on a mere 23-day supply of new unsold vehicles, according to Bloomberg. Traditionally, a 60-day to 70-day supply was considered normal and at times dealers operated with a 90-day supply in order to insure they had precisely the vehicle a customer wanted on hand to quickly complete a sale. <\/p>\n\n\n\n

The inventory drop<\/a><\/span><\/strong> is now expected to hamper sales of new vehicles at least through\u00a0the summer, according to IHS Markit.\u00a0<\/p>\n\n\n\n

\u201cThe dynamics of the announced production slowdowns is beginning to creep into some OEM results,\u201d said Chris Hopson, manager of North American Light Vehicle forecasting for North America, \u201cbut the still strong sales pace for the month reflects that consumers are finding new vehicles to purchase. We expect the sales paces in June and July to continue to recede, but not dramatically.\u201d <\/p>\n\n\n\n

\"\"
Dealers are telling stories of vehicles being purchased as they’re unloaded from the car hauler.<\/figcaption><\/figure><\/div>\n\n\n\n

The May sales figures<\/a><\/span><\/strong>\u00a0appear to reflect\u00a0the shifting efforts by different\u00a0manufacturers.\u00a0<\/p>\n\n\n\n

Shortages shape strategy<\/h2>\n\n\n\n

During the past couple of years, executives from the Ford Motor Co. said repeatedly they planned to pay greater attention to the company\u2019s thriving commercial business, which is built around light-duty trucks and vans. In May the strategic shift was\u00a0apparent\u00a0as Ford\u00a0tripled\u00a0its sales to commercial fleet customers while retail sales dropped by 11.2 percent<\/a><\/span><\/strong>.\u00a0\u00a0<\/p>\n\n\n\n

With vehicles in short supply, Ford also began offering rebates to customers, who were waitng for delivery of a new vehicles, hoping to keep them from cancelling their orders.<\/p>\n\n\n\n

Hopson says while the pace of auto sales in May dropped from the unsustainable levels of March and April, demand was still solid. IHS Markit estimated the seasonal annual rate of sales, even with partial sales numbers, was a healthy 16.6 million to 17 million units for the month, compared to an 18 million unit reading in March and a 18.5 million-unit mark in April.<\/p>\n\n\n\n

\"Chevy
Dealers are especially running low on pickups and SUVs.<\/figcaption><\/figure><\/div>\n\n\n\n

Double-edged sword<\/h2>\n\n\n\n

Data charted by the U.S. Bureau of Economic Analysis indicates inventories have been falling for months while the industry piled up record sales before the pandemic shut down auto production but dropped sharply during the winter and spring of 2021 as the nation\u2019s economy emerged from the grip of COVID-19.   <\/p>\n\n\n\n

Paul Jacobson, General Motors\u2019 chief financial officer, notes the dropping inventories and strong demand also reflect the fact consumers have plenty of cash and are willing to spend it on new vehicles as the economy recovers and begins to expand. <\/p>\n\n\n\n

GM is doing everything it can to satisfy demand such as diverting semiconductors into pickup trucks. Jacobson, however, also admitted the shortages of semiconductors could persist into the second half of the year and even into 2022.<\/p>\n","protected":false},"excerpt":{"rendered":"

Stories of consumers snapping up new vehicles as soon as the car haulers drop them on dealer lots will continue circulating, as inventories of unsold vehicles are steadily dropping as shortages of semiconductors crimps production worldwide. Those trends aren\u2019t likely to change soon, TheDetroitBureau.com reports.<\/p>\n","protected":false},"author":20009,"featured_media":146786,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,8,5],"tags":[904,901,902,344,903],"make":[],"post-state":[335],"category_old":[],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/203274"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/20009"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=203274"}],"version-history":[{"count":8,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/203274\/revisions"}],"predecessor-version":[{"id":203284,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/203274\/revisions\/203284"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/146786"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=203274"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=203274"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=203274"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=203274"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=203274"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=203274"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}