Automotive Supply and Demand Shifting from Recovery Mode to Stability

News provided by

May 03, 2024, 11:00 ET

Inventory Picture Plateauing, Movement Dynamics Pointing to a New and Healthy Normal

GRAND RAPIDS, Mich., May 3, 2024 /PRNewswire/ -- ZeroSum, an automotive retail agency that provides cutting-edge inventory-based digital marketing solutions tailored to dealers, has released its May State of the Dealer report. The ZeroSum State of the Dealer report is the first and premier data source for the new, used, and certified pre-owned automotive market.

New vehicle inventory hit 2.8 million units in April.

ZeroSum's April highlights point to a stabilizing supply and demand picture, representing what is shaping up to be a new normal. These two sides of the equation appear to be moving towards a relatively stable and foundational equilibrium that dealers can plan against. The pace of inventory growth is slowing, with a 1% MoM increase in April. It has long been expected that new vehicle supply would recover but not reach pre-pandemic levels (~3.3M), and it appears that this recent plateau is approaching somewhere near full market recovery.

Vehicle movement, meanwhile, largely kept its gains from the previous month and is expected to maintain that level in May. Higher incentives, which have generally accompanied the increase in supply, are providing a boost to shoppers. Tax refunds, which historically spur vehicle sales in March and April, are helping as well. These supply and demand dynamics are also contributing to a leveling of turn rate and days-to-move metrics, with the former flat MoM at 41% and the latter in the low 60s for the fourth straight month, and marketed prices have also been within a relatively narrow range since November.

"It certainly looks like we are arriving at a new and healthy normal, with supply and demand in a viable equilibrium situation going forward," said Jeff Englishmen, Vice President of Dealer Success at ZeroSum. "If this continues, it provides a foundational set of dynamics for dealers to plan against and deal with."

Used vehicle inventories remained flat in the current month, while vehicle movement retreated from a strong March but held onto gains compared to the end of 2023. The May movement forecast points to a similar outcome. Used car pricing has ticked up slightly since February but remains in a relatively narrow range.

"The monthly movement decline from March to April is to be expected, with used sales more directly affected by tax refunds than new ones," said Englishmen. "But generally speaking, the used vehicle trajectory is starting to stabilize in a pretty healthy way."

ZeroSum serves as a crucial resource for automotive dealers, offering indispensable data on supply and demand trends and delivering unprecedented insights on inventory and 30-day forecasts on vehicle movement. State of the Dealer answers the question that all automotive dealers are wondering: "Is it going to be harder or easier to sell a car next month?"

Click here to download ZeroSum's entire May State of the Dealer Report, including vehicle movement, turn rate, days-to-move, inventory, and pricing trends for new, used, and certified vehicles.

About ZeroSum

ZeroSum is an industry leader in software, marketing, and data. Powered by its SaaS platform, MarketAI, ZeroSum is simplifying and modernizing automotive marketing by leveraging artificial intelligence, data, and scaling ability to acquire new customers. ZeroSum is the first and only company that matches consumer demand with automotive data in real-time for dealer marketing efficiency. For more information, visit www.zerosum.ai

For media inquiries, please contact:
Mike DeVilling
[email protected]

Jennifer Haun
[email protected]

SOURCE ZeroSum