As auto sales sizzle, dealers’ supply of SUVs runs short
Auto industry authorities expect monthly sales figures, slated to be released Tuesday, will show record-setting sales despite an increasingly common issue: not enough vehicles being produced.
“The demand is just insatiable right now for SUVs,” says Erich Merkle, sales analyst for Ford Motor, where supplies are tight on the Explorer, Edge and Lincoln MKX. “That’s what’s hot, and it’s showing up in the sales.”
Honda has the same supply-and-demand problem. When it comes to the HR-V, CR-V and Pilot SUVs, “we can’t get enough of them,” says John Mendel, executive vice president in charge of sales for American Honda.
Even Volkswagen, dogged by a scandal over its diesel emissions, has a few models in tight supply.
Overall, dealers had a 24-day supply of smaller trucks in October on their lots, the most recent month in which supply data were available. That’s down five days from the year before, Edmunds.com reports. The supply of compact crossovers was 44 days on average, down three days from the year before. The industry average in October was a 62-day supply.
Subaru, known for its rugged, smaller crossovers, has the shortest supply on dealer lots — only 19 days’ worth of cars. It says that if it had all the vehicles it will offer for sale through the end of this year on dealers’ lots, they would have already been snapped up by buyers.
“We’d love to make more,” says Michael McHale, spokesman for Subaru, which has tripled sales since 2008 and is expanding factories. “We plan to make more.”
The shortages are a reflection of blistering new-car sales. November’s tally is likely to mark the highest sales total for the month since 2001, Kelley Blue Book says. New-car sales for 2015 are on track to set a record of 17.4 million.
Sales growth is propelled by low interest rates, low unemployment and lots of jalopies on the road that are finally getting replaced.
Most brands see spot shortages. Even as Toyota advertises its new version of the Tacoma pickup, it has less than a 10-day supply, says Bill Fay, head of the Toyota division.
In turn, factories are doing what they can to move away from more slow-selling models. “We’ve done a nice job of shifting our mix to build more light trucks,” Fay says.