Inventories: How Low Will They Go?

As dealers struggle to boost sales in the face of high interest rates and recovering inventories, Ford Executive Chairman Bill Ford calls on the UAW to work with the automaker to resolve their issues so the company remains competitive, especially against foreign manufacturers.

As reported in Wards, franchise dealers have enjoyed upswings in new-car inventory in recent months, reaching their highest levels since spring 2021, according to Cox Automotive and other industry sources. Still, revenues are down. The average transaction price (ATP) for a new vehicle in September 2023 was $47,899, a 0.7% decline year over year; ATPs were down 3.4% from January as incentives continue to increase.  

Supplies may change if the UAW strikes continue indefinitely, says Charlie Chesbrough, a senior economist at Cox. The walkouts, which began on Sept. 15, expanded on Oct. 11 when about 8,700 workers at Ford’s Kentucky Truck Plant joined the so-called “stand-up” strikes.

Still, he notes that Ford dealers’ inventories remain relatively high at this point.

Early in October, Cox reported the Ford Explorer and Lincoln Aviator had a 256 days’ supply. The Bronco was at a 45-day supply and the Ranger was at a 33-day supply. The Mexico-made Maverick is always in short supply, Cox reports. Aside from those models and police vehicles, many Ford models have extra days’ inventory, some in the triple digits, Cox reports.

The good news for all of the Detroit Three automakers and their dealers is that both luxury and non-luxury imports are in short supply, reports Cox. Honda, Toyota, Kia, Subaru and Hyundai have the lowest supply among non-luxury brands. Of luxury brands, Lexus, Mercedes-Benz and Acura have the lowest.

Eight of the 30 top-selling models with the lowest supply are Asian imports, specifically from Toyota, Honda and Kia. At the very bottom are the Honda CR-V and its hybrid version, the new Toyota Grand Highlander and the Toyota Corolla, reports Cox.