As we delve into the market data for April, a few interesting items emerge. Overall, our data indicates a challenging market environment characterized by increasing inventory levels, declining sales volumes, and downward pressure on prices for both new and used vehicles. Current efforts to address aging inventory and carryover percentage have had limited success, highlighting the need for strategic adjustments to adapt to changing market conditions. What we are seeing is that markdowns don’t necessarily equate to a speedier sale. It has to be the right markdown at the right time on the right model.
Inventory aging issues persist into April with new carryover and aged ending inventory increasing by around 10% YoY and used inventory increasing by around 5% YoY. The percentage of aged inventory sold has also increased for both new and used vehicles, suggesting that older inventory is taking longer to move off the lot. The day supply for both new and used vehicles has increased over the year, indicating an oversupply in the market. New car day supply soars by 33 days YoY to 80 days and 10 days MoM to 80 days. Used car day supply also increases but not nearly as severely at 5 days YoY and 6 days MoM to 43.
Sales volume for new vehicles has dropped by 11% compared to the previous month, despite a 4% increase from the previous year. Ending inventory for used vehicles has also increased, albeit to a lesser extent than new vehicles, rising by 1% from the previous month and by 12% compared to the same time last year. Sales volume for used vehicles has experienced a notable decline, dropping by 7% compared to the previous month, with a marginal increase from the previous year.
Now that inventory is back in full swing, it is more important than ever to go back to basics on inventory management. Every unit needs to be evaluated in great detail in terms of pricing and promotion strategies.