Dealers are Bumper-to-Bumper With SUVs: More Coming as Sales Decline

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Car dealers are flush with SUVs just as the economy is slowing.

Auto makers are rolling out new models of crossovers and sport-utility vehicles but SUVs are Bumper-to-Bumper on Dealer Lots.

Sales of crossovers and SUVs are slowing, while models are sitting longer on dealership lots before being sold and companies are resorting to more sales promotions to keep inventory from piling up, analysts say.

And yet, auto makers are getting ready to roll out even more sport-utility offerings in the next few years, further packing U.S. showrooms.

Industry executives don’t anticipate buyers will swing back to sedans en masse. But analysts say demand for crossovers and SUVs is topping out amid a broader slowdown in U.S. auto industry sales, and the market share for these models isn’t likely to grow too much beyond its current size.

“The piece of the pie is about set,” said Jeremy Acevedo, an analyst for Edmunds.com.

Already, crossovers and SUVs are taking longer for dealers to sell, with the average vehicle sitting on the new-vehicle lot for 71 days in May, up from 63 days last year and 51 days in 2015, according to data collected by Edmunds.com.

Sales vs Inventory

Dealers report a "sale" the moment a car is shipped to the dealers.

Those wondering why sales have been so strong need to question: Just how strong have sales really been?

Also, please note the Manufacturing Sector is Rolling Over But Inventories Keep Piling Up.

Mike "Mish" Shedlock

Comments (24)
No. 1-15
numike
numike

suv? crossover? I have a medium size 4dr sedan and I have seen and had my sedan next to some of these crossovers and they appear to be smaller in capacity than my sedan! A few of the crossovers look tiny as if they are just crunched up sedans!

gflop
gflop

My SUV is needed to traverse all the potholes and torn up roads that my gas tax, car property tax, and car registration fees supposedly pay for. Or what is left over from all those redundant taxes after paying my public servants to neglect my neighbors and I.

I also have to pay sales tax on replacement tires that get popped or slashed by those same potholes.

My SUV does not bottom out like a sedan, so I haven't had to repair any "little" items like transmission or differentials. @numike -- It isn't about the capacity

gflop
gflop

Was hoping to read Mish's thoughts on Deutche Bank restructuring plans... Existing equities, dumping assets into a bad bank, ability to continue funding EU follies...

The weather is nice, maybe Mish is working on his tan. Too humid where I am

msurkan
msurkan

And at the same time Tesla sales of sedans just keeps growing.

Six000mileyear
Six000mileyear

The decline in SUV's sold is indicative of a cyclical low. Cash 4 clunkers was a cycle peak, another peak in the late 2012-eary 2013 timframe, the 2015 shown is the third cycle peak, and the 2018 peak was the 4th peak. The next peak should be in mid 2020 to 2021; however it may not be as strong as the 2018 peak.

The decline in sedans is part of a larger trend. It broke the recent trend line, so it may be forming a bottom. Anecdotally, when a large organization joins in a trend, (car manufacturers that have ceased production of most if not all sedans) the trend is nearly over.