By Gary S. Vasilash
Here are some interesting observations from Charlie Chesbrough, senior economist and senior director of Industry Insights at Cox Automotive.
Chesbrough, during a presentation at the Federal Reserve of Chicago’s 28th Annual Automotive Insights Symposium, pointed out that new vehicle inventory at the end of 2021 was 63% below what it was in 2020.
Not a whole lot of inventory on those dealers’ lots.
He said the day supply of vehicles is about 35 days, and that when vehicles show up on dealer lots they get bought up just as quickly as they are dropped off.
What’s more, the average price of a vehicle is MSRP plus something.
In other words, that sticker is a suggestion. The price goes up from there.
What’s more, people are paying more than ever—average transactions at $47,077, according to Kelley Blue Book—and dealers and OEMs are racking up the rewards.
“This is a tight supply situation and I don’t know that the industry is in much of a hurry to change it.”
Why would they?