The semiconductor chip shortage has impacted the automotive world in a major way over the past year or so, forcing automakers to slash production, leaving inventory at some of its lowest levels in recent history, and sending average transaction prices skyrocketing. At the same time, Ford has been shifting to more of a build-to-order sales model, previously admitting that inventory levels may never return to their pre-pandemic highs. As a result, retail orders soared over the past few months, but it seems that new vehicle inventory levels are in fact improving, according to the latest data from Cox Automotive.
At the end of December, Ford had a 40 days’ supply of new vehicle inventory, which is more than the industry average of 35 and far higher than many of its rivals, including Nissan, Volkswagen, Mitsubishi, Subaru, Mazda, Honda, Kia, Chevrolet, and Toyota. Ford is still lagging behind some of the competition in this regard, however, including Ram, Chrysler, Jeep, and Dodge, to name a few.
As for the industry as a whole, new vehicle inventory surpassed the one million unit mark last month for the first time since August – reaching 1.098 million vehicles – while the average listing price came in at a whopping $45,505. That’s a big improvement over November when there were 935,100 new vehicles on dealer lots. Meanwhile, days’ supply improved from 25 in September to 35 last month, which is a five-day improvement from November. Regardless, new vehicle inventory is still a long way from its December 2020 levels, when there were 2.9 million units on dealer lots, representing a 68 days’ supply.
“Inventory levels have been improving modestly, and sales in December increased from November reflecting this supply improvement,” said Charlie Chesbrough, Cox Automotive senior economist. “The expectation is that this trend will continue throughout 2022 as many of the supply chain disruptions of 2021 begin to fade away. However, the rise of the Omicron variant has the potential to disrupt production capabilities yet again, so the risks to the vehicle market, and its available supply, remain elevated.”