October LV Inventory Highest Since April

A boost in production of Asian brands and slower industry sales helped push U.S. dealers’ light-vehicle inventory in October to a 5-month high of 2,264,287 units, 192,349 more than prior month.

It was the most LVs in stock since 2,306,045 units at the end of April, when the full aftereffects of Japan’s natural disasters on production and sales were just starting to be felt.

Related document: Ward’s U.S. Light Vehicle Inventory by Group October 2011

Financially troubled Saab led industry with 215 days’ supply.

As a consequence, the October days’ supply barometer rose sharply to a near-normal 58 from just 49 the two prior months, but stood in stark contrast to the 68 days’ posted a year earlier, when dealer lots held 2,369,761 new LVs.

Still, the inventory rise was not evenly spread and signaled both good and bad news.

Overall, dealers of leading Asian brands continued to re-populate with an additional 96,912 badly needed units added in October, boosting days’ supply to 44 from 37 a month earlier, although it was well-short of prior-year’s 64.

However, that good news appeared short-lived following continued flooding in Thailand that once again had some Japanese makes, in particular Honda and Toyota, facing a new round of parts shortages forcing production cutbacks.

The Detroit Three witnessed a sharp increase to 75 days’ supply in October from prior month’s 62 days’, reflecting in part the arrival of more ’12 models as the traditional new model-year selling period gets under way.

The day’s supply of European makes rose to 43 in October from September’s 41, although Audi and BMW remained critically short of stock at 28 and 29 days’, respectively.

Financially troubled Saab led the industry with a whopping 215 days’ supply, up from September’s 178, despite an 8.7% drop in unit stock, as it sought to draw skeptical buyers into its showrooms.

Other low-volume brands with outsized inventories included Fiat at 142 days’ and Mitsubishi at 112.

Small cars, at 47 days’, had the shortest supply of all segments at the end of October, followed by cross/utility vehicles at 49. Large cars, many of which are phasing out, netted an 84 days’ supply, slightly besting 83 days’ for pickups.

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