Analysis: Supply Could Provide Boost to Auto Sales

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May 26, 2020—Because of the current supply-and-demand with regard to vehicles at dealerships, consumers may soon warm to the idea of buying a new vehicle, noted.

March was rough on auto sales, which fell by 27 percent across in the industry in the first quarter. Sales in late April improved slightly, but numbers still trailed 48 percent behind pre-COVID-19-pandemic forecasts. Multiple automakers shuttered U.S. plants in March due to the COVID-19 crisis, but data suggests that dealers didn't slow their ordering soon enough in response.

On January 1, dealerships had an average of 58 days' worth of inventory, or slightly worse than normal. By and large, though, according to the report there's a glut of cars on most dealership lots these days.

As a group, Honda dealers added 31,400 vehicles to their inventory in March. On May 1, Honda and Volvo each reported 164-day supplies of inventory, and Genesis sat on a 226-day supply of cars. While that's not great news for the overall economy it could be good news for car shoppers, the report said.

If you have good credit, the theory goes, it's easier than ever to secure a no-interest loan from an OEM, and offers to defer one or more payments on both new and existing loans are currently common, too.


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