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July 7, 2019 | Dealers are Bumper-to-Bumper With SUVs: More Coming as Sales Decline

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Car dealers are flush with SUVs just as the economy is slowing.

Auto makers are rolling out new models of crossovers and sport-utility vehicles but SUVs are Bumper-to-Bumper on Dealer Lots.

Sales of crossovers and SUVs are slowing, while models are sitting longer on dealership lots before being sold and companies are resorting to more sales promotions to keep inventory from piling up, analysts say.

And yet, auto makers are getting ready to roll out even more sport-utility offerings in the next few years, further packing U.S. showrooms.

Industry executives don’t anticipate buyers will swing back to sedans en masse. But analysts say demand for crossovers and SUVs is topping out amid a broader slowdown in U.S. auto industry sales, and the market share for these models isn’t likely to grow too much beyond its current size.

“The piece of the pie is about set,” said Jeremy Acevedo, an analyst for Edmunds.com.

Already, crossovers and SUVs are taking longer for dealers to sell, with the average vehicle sitting on the new-vehicle lot for 71 days in May, up from 63 days last year and 51 days in 2015, according to data collected by Edmunds.com.

Sales vs Inventory

Dealers report a “sale” the moment a car is shipped to the dealers.

Those wondering why sales have been so strong need to question: Just how strong have sales really been?

Also, please note the Manufacturing Sector is Rolling Over But Inventories Keep Piling Up.

Mike “Mish” Shedlock

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July 7th, 2019

Posted In: Mish Talk

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