U.S. Light-Vehicle Inventory Remains High in November
Executive Summary
Contrary to expectations, November’s stockpile of light vehicles grew 4.2% for second consecutive month, portending more sales incentives and/or selective production cuts.
The November month-end light-vehicle inventory was expected to fall from the lofty October record of 3,840,054 units, highest for that month in history.
But, despite a modest production shortfall and strong retail deliveries, the stockpile grew by another 4.2% to 3,999,463 units, the highest November count ever and 23% above the month’s 32-year average of 3,251,379.
The days’ supply barometer also remained stuck at a stubbornly high 73 days’, the same as the prior month and well above the more-normal 64 days’ posted a year earlier.
Clearly an uptick in the December selling pace and some modest production cuts are needed to bring inventory more count in line with flattening LV sales.
Without a strong December sales performance, the industry’s newly minted first-quarter production program likely will need some judicious paring. But having put the Q1 slate forward even as November sales and stock counts were being tallied indicates production planners already see signs December-January sales will be strong enough to whittle the outsized stockpile to manageable levels without significant changes to production plans.
Cars continued to be a problem with a month-end inventory of 1,589,469 units, some 6.3% more than were on hand at the end of October, driving days’ supply to 78 on Nov. 30 from the already robust 77 days’ a month earlier.
Reflecting this year’s significant shift in consumer preference to light trucks, November car stocks were only 17,000 units lower a year ago, but represented a significant increase from like-2015’s 64 days’ supply.
Light-trucks, at 70 days’ supply, were somewhat on the high side, but overall were in better shape than the too-low 61 days’ posted in November 2015.
The 2,409,994 light trucks stockpiled last month were 14.4% higher than in like-2015, but remained below the November record of 2,428,481 units set in 2004.
Strong December light-truck sales could bring the 70 supply down sharply, putting dealers in much better shape to support the January-March light-truck production slate.
