The Intersection 1-15-23

It’s been at the top-of-mind for every dealer for at least the last 18 months.

It’s been the single biggest thing holding back sales, regardless of brand.

It’s kept millions of consumers from buying a new vehicle.

It’s not the economy — it’s inventory.

Now, thanks to an unwanted helping hand from high interest rates and low incentives that have slowed the sales rate, new vehicle inventory is climbing again, and picking up speed, as we explain in Monday’s issue of Automotive News.

According to Cox Automotive and the Automotive News Research & Date Center, new-vehicle inventories have topped 1.8 million again for the first time since May 2021, giving dealers who have spent much of the last two years finding creative ways to keep customers waiting an opportunity again to satisfy at least some of their desires for immediate delivery.

There is, of course, nothing magical about 1.8 million as a benchmark for new-vehicle inventory in the United States, especially when the industry spent so long before the pandemic with more than double that figure on hand at any given point. But what is noteworthy is the pace that inventory is building again: According to Cox, the industry has added almost 500,000 vehicles to inventory since the end of September, and stands more than 715,000 more vehicles on lots or on the way than it did a year ago.

For longtime dealers, historically low inventory levels have been uncomfortable, if profitable. And they’ve also allowed dealers and brands to experiment in unprecedented ways to find the right levels of vehicles stocks. The big question is, will this discipline hold?

— Larry P. Vellequette