For more than two years now, new vehicle inventory has remained historically low as automakers struggle to produce vehicles amid numerous supply chain shortages. In fact, back in December 2021, Ford inventory stood at just 40 days’ supply, which was actually better than many of its rivals, but also well below the previous year, when days’ supply stood at 68. Things were far more grim as recently as Q3 2022, when Ford inventory sunk to just 19 days’ supply. However, the latest data from Cox Automotive shows that things have improved considerably over the past few months.
In December, Ford inventory grew significantly, to just over 70 days’ supply, which is higher than the industry average of 58 days, too. In total, there were 1.80 million units of unsold new vehicle inventory at the conclusion of the year, an improvement from 1.62 million in November. Year-over-year, supply grew by 715,000 vehicles, as well as 500,000 since this past September, while overall days’ supply jumped by a substantial 65 percent.
Regardless of this improvement, inventory levels remain low compared to the 2.87 million vehicles – good for a 68 days’ supply – available in December 2020, as well as November 2019, when supply hit 3.50 million vehicles for an 82 days’ supply. New light-vehicle sales rose five percent year-over-year and 12 percent month-over-month to 934,189 units, though as Ford Authority recently reported, average transaction prices once again reached a new record high in December. Regardless, all signs point to incentives possibly making a comeback in the near future.
“New-vehicle inventory climbed through December, nearing what used to be considered ‘normal’ levels in the pre-pandemic era,” said Charlie Chesbrough, Cox Automotive senior economist. “Days of supply at the end of December increased due to production and supply improvements. But sales barely budged. While new-vehicle supply rose 37 percent since September and is 66 percent above a year ago, the sales pace at the end of December had improved by a scant 2 percent. If this trend continues – and it seems likely to do so – automakers will be under heavy pressure to move the metal with higher incentives. This will be the story to watch for in the first part of 2023 – automakers returning to discounting.”
We’ll have more on Ford’s inventory levels soon, so be sure and subscribe to Ford Authority for ongoing Ford news coverage.
Comments
I suspect Ford executives are getting very nervous.
I would normally agree, as 60 days was always the target for days supply.
But it could be in this case, target is higher just as a hedge against any unpredicted hiccough in supply chain.
Better to run a little fat than to empty the pipeline. Once things seem to have stabilized, maybe in spring, DS can be reduced with spiffs.
Wishful thinking. Americans are financially squeezed, are tapping out their credit, and face daunting interest rates while inflation is still on a tear. There will be no more easy money from Washington for a while. 2023 will be a rough year for Ford (and the other auto companies).
I should have said completely agree, except for the inventory caveat I described.
I do agree higher interest rates will drag on sales for a while.
What needs to happen now is the dealerships that decided to add on “market adjustment” charges find themselves with too many vehicles and have to apply big incentives. As the tables turn to give the buyer an upper hand it’s no excuse for dealership unethical behavior. Unfortunately the most popular Ford products are still in high demand so production still can’t meet demand. Try getting an F150 Lightning or Bronco right now.
when the inventory supply surplus begins to bring the preowned prices down to earth, then we’re on the right track.
Soon. Very soon. “During an internal call with staff in November, Carvana’s Chief Executive Officer Ernie Garcia III said the company’s cars were depreciating at a rate of about $25 a day, up from a historical rate of $10 a day.”
Super Duty and F150 are in super high demand. Americans love their ICE trucks. Glad to see we are getting back to truck country.
Have a nice weekend dear Exxon lobbyist.
Shayna is correct. Over 10K orders per day for Super Dutys when the order banks opened late October. EVs fizzled by majority comparison and are now struggling financially.
Supply and demand is way too far apart I personally am very disappointed in Fords ability to overcome this problem I’ve ordered a new 2023 Maverick 2.0 turbo which was supposed to be a better bet on getting one sooner then the hybrid Fords made changes to ramp up production but it’s planning still fall short which is not only disappointing but unfair to its faithful customers like me Fords CEO has even shook up the higher ups and replaced his old people and still shows to be a failure in the eyes of the customer ohh I understand that ford isn’t the only one falling short but come on guys and gals time to get your rears in gear here we are nearly out of the pandemic and things are getting back to normal a company as big as ford needs to get its act together otherwise they will lose out to the competition