New Vehicle Inventory May Be Up From Increased Production In July

New vehicle inventory in the United States is expected to go up 2.87% at the end of August, according to a report by ZeroSum, an automotive marketing software company. Based on data from The Federal Reserve, US car production hit 1.9 million in July, the highest since February 2021.

The report also sees a dip in used car inventory by 3.48%, with prices going up by 0.53%. Although with the increase in new vehicle supply, ZeroSum says it expects used car prices to go back down.

In May, S&P Global Mobility reported that the average age of vehicles in the country has risen to 12.2 years, the oldest ever.

People are holding on to their vehicles longer due to high prices and as the country experiences inventory challenges driven by the global microchip shortage and pandemic-induced supply chain disruptions. The squeeze in chip supply, while expected to improve over the rest of 2022, is still causing some carmakers to lower their production forecast and earnings targets for the year.

An S&P Global update in mid-August also warned that, along with chip supply volatility, carmakers are also looking at “enhanced risk for demand destruction due to macroeconomic conditions,” and thus automakers are expected to still be “less aggressive in their inventory builds” to avoid a rapid shift from low inventory to overstock conditions, which would drive prices down.


Information for this briefing was found via the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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