The end of May saw a significant surge in new vehicle sales, a trend largely attributed to the Memorial Day holiday, a pivotal sales period for the automotive market. This surge led to a decrease in new-vehicle days’ supply to 74 days at the start of June, as reported by Cox Automotive’s vAuto Live Market View data. The total U.S. inventory of unsold new vehicles on June 3, 2024, was 2.89 million units, marking a 55% increase compared to the previous year.
Despite the overall increase in sales, the introduction of 2025 models slightly offset the reduction in supply from the previous model year, which had decreased by 2%. Ford CFO John Lawler underscored the importance of the industry aligning production with demand, a sentiment echoed by General Motors CFO Paul Jacobson, who announced a reduction in expected EV production for 2024. These actions demonstrate manufacturers’ recognition of the high inventory levels and their proactive plans to adjust.
Stellantis brands maintain some of the highest inventory levels in the country, with nearly two-thirds of auto brands exceeding the national average. In contrast, Toyota, Honda, and Lexus have nearly half the national average inventories. Buick, with an average listing price of $32,689, continues to be one of the more affordable brands but has a 71 day’ supply just below the industry average.
Brands like Ram, Jeep, and Dodge are grappling with significant challenges due to their older inventory. Dodge, in particular, holds nearly 48% of previous model year vehicles, one of the highest in the industry. Jeep and Dodge are anticipating new model arrivals in September, while Ram is already receiving new models but still has about 6% of older inventory, resulting in a days’ supply that is more than double the industry average.
Sales in the most recent 30-day period ending June 3 were 9% higher than last year’s. The seasonally adjusted annual rate (SAAR) of sales in May reached 15.9 million, the fastest pace in 2024, suggesting that the industry is on track for its best sales year since 2019. The average listing price for new vehicles at the start of June was $47,390, slightly down by $107 compared to a year ago, while the average transaction price in May was $48,389, unchanged from the previous month.
Incentives and discounts increased to 6.7% of the average transaction price, the highest level since May 2021, as dealers sought to capitalize on the Memorial Day sales momentum. Despite this, affordability remains a concern, with new vehicle prices significantly higher than in 2019 and lower-priced inventory in short supply, averaging a 60 days’ supply for vehicles priced at $40,000 or below.
Overall, the automotive market is witnessing a dynamic shift. Manufacturers and dealers are adjusting strategies in response to changing inventory levels and consumer demand, setting the stage for potentially strong sales through the rest of the year.
