In January, the used car market demonstrated resilience, characterized by stable sales, steady pricing, and efficient inventory turnover. Demand for pre-owned vehicles remained strong, as inventory continued to move without requiring significant additional price reductions. This stability suggests that consumers continue to find value in used vehicles, possibly due to affordability concerns or shifting financial priorities.
Conversely, the new car market faced a more challenging landscape. Inventory levels grew at a faster pace than demand, leading to increased discounting and pricing pressure. The accumulation of aging inventory signals potential oversupply issues, which could further impact profitability in the coming months.
Market dynamics continue to be influenced by economic uncertainty, tariffs, evolving consumer preferences, and regulatory policies. These challenges require a strategic approach from dealers, who must carefully manage their inventory to avoid excessive stockpiles while remaining competitive in a shifting market.
Maintaining pricing discipline, aligning stock levels with demand trends, and adapting to changing consumer behaviors will be crucial in navigating the months ahead.
New Vehicles:
- Dealers will need to manage economic pressures, rising inventories, and shifting market dynamics while adapting to a more digital, consumer-centric business environment. Proactive inventory management, competitive pricing strategies, and a focus on customer engagement will be critical to navigating these challenges effectively.
- New vehicle sales decreased by 13% MoM as inventory increased by 5% causing day supply to continue its increasing trend. It increased by 9 days to 82 days, an increase of 16 days YoY.
- Aged inventory saw a slight increase of 2% MoM but increased 7% YoY to 57%.
- Last listed price dropped by 2% MoM as markdowns remained steady. Overall list price increased by 4% YoY with EVs increasing by 9% and hybrids dropping by 5%.
Used Vehicles:
- Used vehicle sales grew by 6% MoM with pieces falling slightly by 2% MoM but 4% YoY.
- Day supply decreased another 2 days MoM and YoY to 42 days.
- Aged inventory fell slightly by 1% MoM but fell by 3% YoY to 49%.
Recommended action steps for upcoming months:
Dealers will need to manage economic pressures, rising inventories, and shifting market dynamics while adapting to a more digital, consumer-centric business environment. Proactive inventory management, competitive pricing strategies, and a focus on customer engagement will be critical to navigating these challenges effectively.