Dealers’ Light-Vehicle Inventory Down One-Third at End of May

U.S. dealers can be excused for wondering if and when their lots will ever again see a “normal” days’ supply of light vehicles, as a one-third decline in unit stock in May translated into a subpar 53 days’.

Only twice in the past 15 months – 67 days’ supply in January and 61 last November – has the LV tally been in the 60-70 days’ range traditionally thought to provide the best choice of models to consumers, while not saddling dealers with unnecessary carrying costs or overburdening auto makers with incentives.

Having just 2,700,364 units in dealer inventory on May 31 helps explain why many summer plant shutdowns are being reshuffled this year. It also may prompt manufacturers to boost their newly minted third-quarter production plans if the selling pace remains strong.

Even more worrisome to many dealers is the weak 44 days’ supply of new cars posted at the end of last month, down from April’s 45 and the lowest since last September’s 43. Light-truck stock also fell in May to 61 days’ from 67 in April.

Ford, at 53, had the lowest days’ supply of the Detroit Three in May, encompassing a mere 32 days’ of the popular Focus C-car, one of the models set for a production boost in coming months.

Chrysler’s 61 days’ supply appeared to hit the sweet spot but included just 44 days’ of new cars, including just 19 for the soon-to-be-replaced Avenger that gives way to the all-new ’13 Dart sedan.

While General Motors’ 74 days’ supply of LVs was on the high side at the end of May, dealers held just 54 days’ of Chevrolet cars, with the Malibu and Impala at 38 and 34, respectively.

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