Sandy Boosts October Inventory, Days’ Supply

At first glance, the 9.2% increase in light-vehicle inventory to 3,048,230 units on Oct. 31 from prior-month’s 2,789,121 might seem welcome relief from the shortages that have plagued dealers for some time.

In actuality, it is a false reading resulting from Hurricane Sandy’s negative impact on East Coast LV sales in the month’s final days, a time when dealers go all-out to hit volume targets and qualify for lucrative incentive payments from auto makers.

In Sandy’s aftermath, unit stock and days’ supply are expected to fall again sharply in November and December as dealer showrooms pack with consumers who delayed purchases during the storm or now need to replace vehicles destroyed by the hurricane.

Thus, the dramatic jump in LV days’ supply to 73 in October from September’s 59 and prior-year’s 58 is expected to reverse sharply, falling to 60 or less in November as vehicle sales recover.

The inventory rise hit nearly all brands in most market segments, adding four – Acura, Buick, Lincoln and Volvo – to the list of LVs with days’ supply in excess of 100. There now are seven marques in triple digits, the highest being Fiat’s 133 days’ supply.

Only two brands, BMW, at 30 vs. 33, and Suzuki, at 71 vs. 78, posted lower days’ supplies in October than in September.

Even Hyundai and Kia saw their figures rise to 39 days’ each last month from 25 in September.

While the industry’s inventory surge was across all market segments, the impact was felt most acutely in large cars, where days’ supply rose 33.8% to 91 from 68. Pickups were least affected, up 7.7% to 100 days’ from 91.

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