Like it or not, summer is almost over. The days are quickly counting down, whether you’re trying to get in a last-minute vacation or hoping for extra holiday showroom traffic.
After four weeks of falling prices, we can safely call used car pro a pattern. Unless you’ve been incommunicado on a tropical island (lucky you), it was impossible to miss the passage of California’s ban on ICE-powered vehicles. We’ll look at some of the numbers behind this historic measure.
How were your truck sales during record gas prices? A new report sheds light on the matter.
Market At A Glance
If there’s one thing to remember about August 2022 is that it’s the first time there’s been a month-long decline in the CarGurus used car price index since the start of the apocalypse.
- US auto industry leads world in production cuts due to chip shortages (The Register)
- EV's are going to cost jobs in the auto industry (Business Insider)
- Toyota to convert engine plants to battery manufacturers to support EV push (Automotive News)
- Ford, Hyundai, and Kia gain while Toyota and Honda fall behind (Automotive News)
- Cutting the WRX STI was a bad decision for Subaru (CarBuzz)
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California ICE Ban Gets Real
A Cox Automotive report shows a supply of 1.09 million unsold new cars in the U.S. at the end of July. This works out to 37 days of supply. At this time last year, the supply stood at 1.07 million units or 29 days of supply.
“This marks the first time in 2022 that the new-vehicle supply has been higher compared with the same week last year. But this is not due to a big jump in inventory recently, but rather an indication of how bad it was last year,” said Cox senior economist Charlie Chesbrough.
Given high gas prices, it’s no surprise that inventory was in the worst shape for smaller, more fuel-efficient models. On the contrary, there’s ready availability of full-sized SUVs, pickups, and passenger cars (with supplies in the 50-60 days range).
As gas prices continue to drop from record levels, it’s worth keeping an eye on how new car inventories may change.
- Automotive Ventures Auto Intel booklet - (Automotive Ventures)
- The 5 Biggest Mistakes Sales Reps Make on The Inbound Sales Call (Digital Dealer)
- How to Build the Best Automotive Internet Sales Process for your Dealership (ActiveEngage)
High Gas Prices Influence Truck Buying
The 200,000-unit EV production cap has been eliminated in favor of a ten-year period open to all automakers (with other conditions, see below). Future buyers of qualifying Tesla and GM vehicles can again claim a $7,500 tax credit as of January 1, 2023
Unsurprisingly, the price at the pump impacts what truck buyers shop for. And a new report from Cox Automotive reveals that even popular market segments aren’t immune to higher energy costs. Before gas prices skyrocketed since the Russia-Ukraine war, full-sized pickups were the third most shopped-for vehicle on Kelley Blue Book.
But, fears of $5 per gallon fill-ups knocked that interest down to eighth place. Instead, buyers looked more at mid-sized pickups and compact to larger SUVs. The information also revealed that shopping for electric pickups increased by 57% since the start of the year.
And while the worst appears to be over (for the time being), gas prices are still 25% higher than this time last year. And this is when the other shoe drops as far as inventory. Dealers are sitting on an abundant supply of perennial bestsellers. The data reports 88 days of supply for the RAM 1500, 71 days for the Chevy Silverado, and 48 days for the Ford F-150. Rising interest rates and falling housing starts aren’t helping the situation.
Interest in midsize trucks is up 12% for the year, but this only pours salt on the wounds of RAM dealers who lack an entry in this category. And here’s another interesting tidbit; shopping volume for midsize and full-size trucks was the same during the two months of peak gas prices.
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