U.S. Light-Vehicle Inventory Ends 2013 at 7-Year High

December 2013’s light-vehicle inventory finished at a 7-year high for the month, matching the 7-year-best sales total for the period.

Inventory reached 3.447 million units, 13.6% above year-ago but marking a 5.3% decline from the prior month. Because December is one of the strongest months for sales, the November-to-December inventory decline was expected.

The month-to-month decline in days’ supply from 76 to 61 also was not unusual. Year-ago days’ supply was 58.

Inventory of North American-built LVs totaled 2.536 million units, 14.0% above year-ago and a 5.3% decline from the prior month. Days’ supply dropped from November’s 81 to 64, but was above year-ago’s 60.

Although total inventory usually declines November-to-December, the import component normally rises. This year it dropped.

Overseas-built stock totaled 655,987 units in December, 5.2% below November. However, December’s total was 14.0% above year-ago and a 7-year high for the month. Import days’ supply, which typically drops by three or four days November-to-December, fell from 62 to 50 on Dec. 31.

A sharp upward spike in December’s sales of imported LVs was responsible for the decline.

Spurred by luxury cars and CUVs, December’s import sales increased 13.9% from year-ago, compared with 1.4% for domestically made LVs. Import market penetration in December shot to 23.3% from 21.3% a year ago.

The first quarter is a stronger time of the year for sales of passenger-oriented vehicles. That includes small and midsize cars, Large CUVs and, to a lesser extent, minivans.

Except for the Chevrolet Traverse, with inventory down 11.7% from year-ago, stocks of all Large CUVs are in ample supply, including the Buick Enclave, Ford Flex, GMC Acadia and Nissan Pathfinder. With a 78 days’ supply, Traverse still has plenty of availability.

Inventory of Small and Middle Cars combined are up 15.1%.

However, sales growth stalled for both segments in the latter part of 2013, and midsize-car inventory is being pared by some manufacturers through extended holiday production shutdowns.

The slowdown in cars appears to have benefited CUVs.

In particular, Middle CUVs last year bucked their historical pattern of declining first-quarter market share from the prior quarter and likely will do so again this year.

Sales will be bolstered by availability of the new Jeep Cherokee, and ramp-ups of redesigned versions of the Nissan Rogue and Toyota Highlander, both just starting production in fourth-quarter 2013. Sales within the fast-growing segment should continue to easily outdo year-ago totals through the first three months of 2014.

In 2013, first-quarter share of Middle CUVs increased to 15.6% from 15.5% in fourth-quarter 2012. Fourth-quarter 2013 share surged to 17.0% and inventory is in place to maintain that percentage in January-March this year, if not surpass it.

Middle CUV inventory ended December 17.7% above year-ago, while the segment’s 52-days’ supply was nearly even with like-2012’s 51.

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