U.S. LV Inventory Rises 1.5% as Industry Heads Into Record Setting December
With some vehicles potentially in tight supply, automakers might need to goose incentives to reach a fourth straight 18 million-unit SAAR.
![U.S. LV Inventory Rises 1.5% as Industry Heads Into Record Setting December U.S. LV Inventory Rises 1.5% as Industry Heads Into Record Setting December](https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/blt53e657141fa20188/6619861305c66c602603ebe0/usinventory1511a.png?width=1280&auto=webp&quality=95&format=jpg&disable=upscale)
U.S. dealer inventory should not be a hindrance to December continuing the sales bonanza of the past several months, and a fourth straight month with the seasonally adjusted annual rate topping 18 million units is not unrealistic.
Irrespective of the SAAR, December’s raw sales volume will be the highest ever for the month and probably for the year.
Initial modeling for December indicates sales volume of 1.67 million units, or a 17.6 million SAAR. In total, the inventory is there to surpass the initial estimate, but it might be necessary to goose incentives above November’s levels to get there, especially because there are some sectors in the vehicle mix that appear somewhat lean for an 18 million-unit annual sales pace.
The end of the month will tell whether the industry goes higher. There will be nearly a full week of selling days remaining in the month after Christmas, and the Monday following New Year’s Day will be included in December’s results, leaving plenty of opportunity to pump demand.
Light-vehicle inventory increased 2.8% from November to 3.68 million units, 1.5% above year-ago. Days’ supply was 64, down from year-ago’s 70 and October’s 69.
More importantly, trucks, the bulk of the market, posted dealer stocks of 2.10 million, 8.6% above year-ago. With car inventory down 6.7% from November 2014, trucks could reach 60% sales penetration in December.
CUVs and Small and Large Vans entered December with double-digit inventory increases over year-ago. Depending on how they are grouped, inventory for probably the strongest growth sector, import CUVs, which are coming off a 64% year-over-year sales increase in November, and market share of 9.7% vs. year-ago’s 6.5%, is up a whopping 68% from like-2014.
Another booming sector, which includes a strong import contingency, is luxury trucks. Combined sales for luxury CUVs and SUVs were up 28.0% in November, bringing their year-to-date results to 19.3% above like-2014. Luxury-truck inventory heading into December, typically a strong month for luxury vehicles, was up a solid 11.1% though it pales compared with recent sales gains. However, the volume should be enough to handle demand no matter how strong. If dealers do come up short, it won’t be enough to make a noticeable dent in total LV volume.
Inventory of SUVs was up 6.0% as surging demand for a few key vehicles in the segment group, such as the Ford Explorer and Jeep Wrangler, have drained their stocks to well below year-ago levels. A couple SUVs being phased out of the market also partly explains why inventory levels are not more robust.
Inventory for pickups ended November 2.1% below year-ago. However, sales of pickups are up nearly 10% through the first 11 months of this year even though inventory in most months has been down more than 10% from like-2014 levels.
Except for the Large Car group, which accounts for less than 2% of sales, Nov. 30 inventory for each car group is down from year-ago – in line with demand.
Import LVs, which posted a 23-month-high sales penetration of 23.0% in November, with volume up 17.0% from same-month 2014, started December with stock up 12.0% from year-ago. Inventory of North American-built LVs – coming off a 2.2% sales decline last month – was down 0.6% from year-ago.
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