Here are the top 4 takeaways from our monthly US inventory review:

1. Inventory hits post-pandemic high for second month in a row.

At the end of October 2024, available retail advertised inventory in the US was 3.06 million vehicles, a slight 0.2% increase over September. This marks the second consecutive month of new vehicle inventory being over three million units, which is a high since the pandemic.

Advertised Inventory Count, June 2022 - October 2024

2. Conversely, electric vehicle inventory continues to fall

Despite the overall growth in inventory during the past several months, electric vehicle inventory continued to fall, decreasing 2.6% compared to September. The recent decrease is a reversal of the trend from the past couple of years—where EVs inventory grew at a rate exceeding that of ICE vehicles—and is perhaps a sign of lower-than-expected demand leading to reduced EV production.

Electric Vehicle Retail Advertised Inventory, June 2022 - October 2024

Among EV models, Ford Mustang Mach-E inventory increased 8.3% from September, but it is down 25.6% vs. October 2023. The Honda Prologue demonstrated the highest month-over-month growth in October, ending the month up 17.0% from September and at slightly more than 15,000 vehicles.  Most of the other top EV models have continued to show lower decreasing inventory since this past spring.

Electric Vehicle Advertised Inventory by Model, June 2022 - October 2024

3. 2025 model years are gaining momentum even as 2024 inventory remains high

2025 model year vehicles continue their rollout, up 27.3% vs. last month and now close to the same level as 2024 model year inventory. 2023 model year has very few vehicles remaining now.

Advertised Inventory by Model Year, June 2022 - October 2024

Of 2024 model year vehicles, Ford has the most by far and is the only one of the top brands that has increased its 2024 inventory in the last three months.

2024 Model Year Inventory by Brand

4. Average days on dealer lots has increased for all top brands

The average days on dealer lots increased slightly to 81 days at the end of October, continuing the steady increases seen over the past year.

Average Days on Dealer Lots

While all of the top brands have shown increases in the average length of their inventory in October, Ram and Jeep brands have shown the greatest increases over the past several months and now are both over 150 days.

Average Days on Dealer Lots, by Brand

Toyota, at 32 days, and Honda, at 46 days show the lowest average age of advertised inventory, in part due to the amount of pipeline that dealers show in their listings.

]]>http://prod.azure.ihsmarkit.com/mobility/en/research-analysis/october-2024-us-vehicle-inventory-remains-high.html~/mobility/en/research-analysis/october-2024-us-vehicle-inventory-remains-high.htmlMatt Trommer AutomotiveLight Vehicleshttp://prod.azure.ihsmarkit.com/mobility/en/research-analysis/october-2024-us-vehicle-inventory-remains-high.htmlWed, 20 Nov 2024 02:10:24HIGHLIGHTS (vs Q2 2024)

• Zero emission vehicles (ZEVs) account for 1 in 6 new vehicles registered in Canada. ZEVs market share was 16.5% for Q3 2024; up from 13.4%.
• ZEVs volume increased 14.4% while total light duty vehicles (GVW =< 8,500 lbs) volume decreased by 6.8%.
• The market share of battery electric vehicles (BEV) increased to 12.2%; with volume increasing by 15.1%.

ZEV Registrations Hit New Highs

In the third quarter of 2024, Canada's ZEV market continued its upward trajectory, achieving a new milestone with a 16.5% adoption rate. This means that approximately 1 in every 6 new cars registered in Canada was a ZEV. This growth reflects a 14.4% increase in overall ZEV volume compared to the previous quarter, driven by a 15.1% rise in BEVs and a 12.4% increase in plug-in hybrid electric vehicles (PHEVs).

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Here's a close look at global production data by region and our updated November production forecast.

Top Takeaways for the Month

Light vehicle production forecasts are mixed globally, with notable downgrades in Europe and South Asia, while Greater China sees an upward revision due to improved sales from government scrappage subsidies. The US elections have introduced uncertainties that are expected to negatively affect BEV volumes and the electrification mix. Overall, the 2024 production outlook is slightly stronger, but ongoing inventory management and demand dynamics continue to pose challenges across various regions.

Noteworthy Adjustments

Europe: The light vehicle production outlook for Europe has been downgraded by 92,000 units for 2024, primarily due to reduced forecasts for Stellantis and Volvo. Concerns over potential strikes and production disruptions, including flooding in Spain, have further impacted the forecast.

Greater China: Greater China's production outlook has been increased by 409,000 units for 2024, driven by a recovery in sales supported by scrappage subsidies. The market is expected to grow by 2.4% year-over-year, although economic uncertainties may temper future projections.

Japan/Korea: Japan's production outlook for 2025 has been upgraded by 39,000 units, with Toyota expected to maintain strong momentum. In contrast, South Korea's production forecast for 2024 has been reduced by 12,000 units due to disappointing domestic sales and exports.

North America: North America's production outlook remains largely unchanged and continues to generally reflect needed inventory correction. Ford's production for 2025 has been revised down by 45,000 units on the expected need to de-stock as we enter the new year. Additionally, production for Stellantis for 2024 was reduced by 48,000 units due to meaningful production downtime in Q4-2024 in order to rein in elevated inventories.

South America: The South American light vehicle production outlook has been increased by 23,000 units for 2024, attributed to stronger-than-expected production results in Brazil and Argentina. Adjustments for 2025 and 2026 were minor, focusing on vehicle timing changes.

South Asia: South Asia's production outlook has been reduced by 63,000 units for 2024, driven by production weaknesses in the ASEAN market and high inventory levels in India. Downward revisions for 2025 and 2026 reflect incremental domestic and export demand challenges, particularly in the ASEAN market.

Download a free light vehicle production forecast sample here.

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It could be described as the automotive industry's biggest elephant in the room: how the structural costs of the Volkswagen Group's German operations have held back the company's financial competitiveness for decades.

On 4 September the company's CEO Oliver Blume stood alongside his CFO Arno Antlitz at the company's Wolfsburg headquarters and addressed workers about the desperate need for the company to cut the cost base from its German operations. Both men were heckled by a huge crowd of around 20,000 workers as they told a story that those workers simply did not want to hear: Maintaining the status quo was simply not an option. The workers shouted "Auf Wiedersehen"-German for 'goodbye'—to the men, expressing the notion that it was management, not workers, that has been the issue at VW for decades.

And thus the battle lines were drawn for the biggest showdown between management and workers in German industrial history.

Volkswagen's Costly German Operations

In the old days the company could bury its head in the sand and simply ignore this extremely expensive elephant that was flattening the company's profits. Despite the massive €35 billion-plus cost of the VW emissions scandal, the company was still able to achieve reasonable profitability in the latter part of the 2010s and in the early 2020s, including the pandemic.

In the current debate and spotlight on Volkswagen's profitability, it should be highlighted that the discussion is primarily focused on one element within the Group—the Volkswagen passenger car brand.

Declining Production Volumes at German Plants

The Volkswagen passenger car brand has six car plants in Germany, from the giant Wolfsburg facility that also acts as the company corporate and symbolic headquarters to smaller, more flexible facilities, such as Osnabruck that has been used more recently as a contract manufacturing facility for Porsche. One of the major issues is that these plants are simply not making anywhere near as many cars as they were a decade ago. According to S&P Global Mobility these plants (which also included the Wolfsburg 2 line in our old forecast, with this now being consolidated into all Wolfsburg volumes) made just under 1.4 million cars in 2015. By last year this figure fell to just under 782,000 units.

High Labor Costs and Fewer Cars Produced

And it is not just the fact that less cars are being made. The company also has its own components manufacturing plants in Kassel, the largest automotive component manufacturing plant in the world with 16,500 employees, as well as Braunschweig, which has 7,000 staff and Salzgitter which has 7,500. In total the VW brand has about 120,000 staff employed in its German operations.

These men and women are some of the best paid automotive workers in the world. Blume said last week in an interview with Bild am Sonntag that the company's German workers are often paid more than twice that of their peers in VW's other European locations. In another interview, Antlitz said that since the pandemic European auto demand has not rebounded, with deliveries still 2 million units below peak levels. Antlitz noted that VW has lost sales equivalent to around 500,000 cars, necessitating increased productivity and cost reduction.

The Battle of the Key Players

The main actors in this drama are Blume; Antlitz; the head of the all-powerful works council Daniela Cavallo; Thorsten Gröger, the chief negotiator of IG Metall, Europe's biggest union; and the VW Group's equivalent Arne Meiswinkel. On the eve of the second round of talks between all parties, Cavallo decided to go public with all of VW's demands, despite the fact that the company had not at that stage officially revealed them to the outside world. She stated that the plan was to close three of the German plants and trim tens of thousands of the workforce. This is in addition to a 10% across the board pay cut for remaining workers that VW had already publicly requested from its workers.

For a company that has not shuttered a German plant in its 78-year history, this represents a bloodbath. The company's latest financial figures were announced just as the second negotiating round got underway and provided serious ammunition for VW and its negotiation team, while offering grim reading for their counterparts and the company's shareholders. Volkswagen Group operating profit dropped almost 42% in the third quarter of this year and its operating margin was just 3.6%. The Volkswagen brand had an operating margin of just 2.1%. The target is 6.5%.

The Decline of Volkswagen's Chinese Market Dominance

The company is facing two major issues that mean the German labour elephant can no longer be ignored. VW was for decades the market leader and a dominant presence in the Chinese market, with the company at various stages generating the majority of its profits from the market. The rise of the hugely impressive new generation of Chinese OEMs such as BYD, SAIC's MG brand, Nio, and a host of others, means that this is no longer the case, especially with their impressive BEV designs in the market that is the world's biggest for electric vehicles. This is without even mentioning the impact that Tesla has had on both its Chinese operations and its business elsewhere.

As Blume said in his September Wolfsburg workers address; "There are no more cheques coming from China." The company is also finding the move to electrification massively profit sapping. Its cars are not particularly cheap if sold near list price and the tech is not as impressive to most buyers as those in the aforementioned Chinese brands. And R&D costs are enormous, while focus is diluted by issues with the CARIAD tech development unit and its standalone battery unit PowerCo.

Political and Economic Pressures

German chancellor Olaf Scholz has also had his say on the dispute. He said that: "Possible wrong management decisions from the past must not be at the expense of employees." This might be good politics from a chancellor wanting to retain his position. But this is magical thinking that ignores an inconvenient truth. VW cannot be globally competitive with domestic labour costs twice that of elsewhere in Europe. The truth is that VW's German structural costs are strangling the company financially and the elephant needs to be put on a crash diet.

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With the average age of light vehicles in the US continuing to rise, the aftermarket remains poised for growth, albeit in different ways than historically seen. The average age of the fleet has risen to 12.6 years, which will continue to provide increased opportunities to maintain vehicles over their extending lifecycle.

Todd Campau, aftermarket practice leader, S&P Global Mobility will share insights and highlight key factors of influence on the aftermarket during two presentations next week at the Automotive Aftermarket Products Expo (AAPEX) and SEMA Shows.

His presentation, Trends Impacting the North American Aftermarket, will be replicated at both events:

• AAPEX - November 5, 11-12 pm, The Venetian Level 1, Galileo Room 901
• SEMA - November 7, 11-12 pm, Las Vegas Convention Center, Room W311

S&P Global Mobility Exhibit Details

S&P Global Mobility will demonstrate its suite of aftermarket product solutions across the global passenger and commercial vehicle aftermarket at its AAPEX exhibit, booth A4922 at the Venetian Expo Center. Experts will be on hand for product demonstrations and discussions on the S&P Global Mobility suite of innovative solutions, including Vehicles-in-Operation, Vehicle Miles Traveled, VIN Data & Services and Market & Technology insights.

Preview of Insights to Be Shared

Vehicle maintenance and repair opportunities are expected to rise as the fleet continues to age as a whole. This is led by the fact that record new vehicle sales from 2015-2019 of over 17 million vehicles annually are all now entering the aftermarket sweet spot, which is typically identified as starting at the age of 6 years old and extending to at least 12 years of age, or older.

Further, while the pandemic brought on a year of slower mileage accumulation to the vehicle fleet in 2020, subsequent years have demonstrated an increasingly strong volume of vehicle miles traveled (VMT) and 2024 is trending to be the better still with light vehicles expecting to eclipse 13,000 miles traveled on average for the year. Also contributing to increasing opportunities is a modest scrappage rate that continues to be just 4.6%, according to our analysis.

"With new vehicle sales continuing to hover just under 16 million units and scrappage rates continuing to be moderate, opportunities for aftermarket maintenance are repair are expected to abound," Campau said. "That said, the composition of the vehicles in operation has been shifting, and so too have the demographics of vehicle owners. To capitalize on available opportunities, retailers and repair facilities will need to be agile in shifting their product and service offerings and adjusting messaging to reach consumers effectively," he added.