In the current volatile and challenging car market, understanding the Market Day Supply (MDS) is crucial for buyers. MDS represents the number of days it would take to sell all units of a specific car model, assuming no additional inventory is added, providing insight into negotiability. CarEdge Data has revealed the most and least available inventory for new cars in December, ranging from just 7 days of supply to an astonishing two-year supply.
Inventory levels significantly impact the negotiation power of buyers. When there’s an oversupply of cars, dealers are more likely to negotiate, whereas a low supply makes negotiations tougher. Stellantis, the parent company of brands like Chrysler, Dodge, Jeep, and Ram, has consistently faced challenges, leading the list of slowest-selling cars for several months. High-end luxury and sports cars are also affected, with the average transaction price of the slowest-selling cars being $20,000 higher than the fastest-selling cars.
In December, Stellantis brands continued to dominate the list of slowest-selling cars, with the Ram 2500 holding the top spot with a staggering 784-day supply, representing over two years of market supply. Dodge, Jeep, and Chrysler models also made it to the top 10. The average transaction price for the slowest-selling models is $71,774. Luxury cars and Ford’s Mustang Mach-E also featured in the list, highlighting a trend of high-priced vehicles facing challenges in the current market.
The fastest-selling cars in December showcased patterns similar to November, with Toyota having the largest share in the bottom 10, along with a few luxury cars and popular affordable models like the Toyota models, Ford Maverick, and Chevrolet Trax. Interestingly, despite low inventory, automakers have found that profit margins remain high, potentially indicating a shift in their business model. Some brands may face difficulty returning to pre-pandemic inventory levels.
For buyers in 2024, competition is expected to be intense for the fastest-selling models, and dealers may be less willing to negotiate, especially with high demand for popular affordable cars. The average transaction price for the fastest-selling models is $51,351, approximately $20,000 less than the slowest-selling models. In conclusion, understanding the inventory levels and negotiating skills will be essential for buyers navigating the complex and dynamic car market in the coming year.
Highest Inventory Vehicles – January 2024 (Source: CarEdge)
Lowest Inventory Vehicles – January 2024 (Source: CarEdge)
