In May, a decreasing day supply and stable sales in the used car market suggested strong demand. This requires dealers to have a more disciplined approach to their inventory management. Conversely, the high day supply in the new car market indicates potential oversupply issues or weaker demand.
New Vehicles:
- Aged inventory percentages held steady MoM but increased five times more than used cars YoY at 11%.
- The percentage of markdowns in sold inventory also shows an increasing trend, indicating a continued reliance on markdowns to generate sales.
- The new vehicle trend of increasing day supply continued with a 2 day increase to 74 days this month and a 29 day increase YoY.
Used Vehicles:
- The day supply shows a decreasing trend of 2% for both YoY and MoM, indicating better inventory management and higher consumer demand.
A peek into June:
- There will be continued growth in the new vehicle pickup segment as prices continue to fall.
- New SUVs will hit the highest average list price in a year.
Recommended action steps for upcoming months:
- Scrutinize your inventory daily and recap it weekly.
- Carefully plot out a markdown strategy and make sure you are reviewing other dealer’s pricing in the market for markdown guidance.