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

-edited

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.

Tengen
Tengen

I don't understand why hatchbacks aren't more popular, I love them and wouldn't own anything else. It drives better than a SUV, gets better mileage, and you can still haul a lot of stuff when you need to. Get one with 18" tires and you can handle anything except rough off-roading, but even a lot of SUVs sold today don't off-road well.

numike
numike

There's also the perverse incentive that "trucks" depreciate differently such that being over 6,000 lbs (including SUVs), giving a tax incentive to make and buy unnecessarily heavy vehicles. I know at least a few F150 owners that set up "consulting businesses" so they could claim the depreciation on their personal vehicles. It probably wouldn't stand up to an audit but the chances of getting hit with one is pretty slim. https://www.thetaxadviser.com/issues/2015/feb/tax-trends-01.html

Croft1968
Croft1968

I'm happy with my Volkswagen Alltrack it's all wheel drive goes where I need and want to go and it didn't cost $45k like some of the SUV crossover thing's

Mish
Mish

Editor

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

Good call I was in Door County Wisconsin golfing and taking pictures since Wednesday Home now

Mbhogel1974
Mbhogel1974

I'm looking to buy a new SUV soon and wanted to know when would be a good time to buy? Now or wait a while.

KidHorn
KidHorn

My 3 kids all want a small sedan instead of a SUV. Not sure why. Maybe it's because they've been hauled around in SUVs and minivans their whole life.

Henryjack
Henryjack

I drive one of those tiny SUV’s.(Q3) Why? It sits up higher and helps me see several cars ahead of me or through the huge SUVs that block my vision when I am in traffic. I “feel” safer.

Henryjack
Henryjack

Mish! We are going to Door County in early October. Hope there is no snow yet. Please let me know of any restaurants/hotels/motels etal that we should not miss (or should miss as the case may be). Use my email address if you wish. We live in Charleston,SC and plan on spending 4-6 days traveling Door County. Spent (misspent?) my college years in Eagle River and spent 3 years as a Minocquabat. When I am in the old folks home, in the not too distant future, and you see me in my rocking chair drooling out of the corner of my mouth and incoherent, please do no disturb me. I am thinking about those times!

ClydeThe Raven
ClydeThe Raven

The new car dealer lots in here in Whitefish MT where I live are chock full of cars. Same with high end ski boats and other recreational watercraft. Somebody is gonna get stuck with a lot of inventory when the next recession gets going in earnest.

everything
everything

Eeek, look at that poor van inventory on the bottom. If you want to live out of something, I thought the van down by the river was the way to go.