January New-Vehicle Sales Drop, Days’ Supply Surges 26% Due to Weather Disruptions and New Year Lull

December brought an optimistic end to the year, with consumer sentiment riding high and high-priced vehicles selling like hotcakes. As is common in the new year, consumers slow down; new-vehicle sales in January were down by 25% month over month. Weather disruptions and the general desire to focus on the year ahead leave more buyers on the sidelines, but sales are expected to pick up as tax refund season begins.

According to an analysis of vAuto Live Market View data, the total U.S. supply of available unsold new vehicles at the start of February stood at 2.92 million units, registering only 1.2% higher than the start of January. Inventory was 14.2% higher than a year ago at the start of February. Sales are tracking at 7.1% higher than a year ago as well, giving the dealers confidence in the market and consumers freedom of choice of vehicle. That said, days’ supply increased by 26% since the start of January, hitting 96 days in the latest measure as the sales pace slowed notably compared to the hot run through December.

Six brands made up 57% of the sales in January and maintained 53% of new-vehicle inventory on showroom floors. Toyota, Ford, Chevrolet, Honda, Kia and Hyundai made up the six best sellers. Ford and Chevrolet are the only two carrying more than 10% of new-vehicle inventory at 17% and 11%, respectively. While most brands sit on an average supply of prior model year vehicles, Ford is weighed down by 63% of model year 2024 in inventory.

Meanwhile, Stellantis brands are no longer topping the charts in days’ supply. Chrysler has 109 days, Ram has 120 days, Jeep has 128 days, and Dodge has 133 days. While these are still heavy in supply compared to the overall industry average of 96, many other brands are carrying more inventory, including Ford, Lincoln, Buick and Hyundai. Lower prices and aggressive sales work have helped bring Stellantis inventory into relatively normal levels.

No surprise, compact SUVs and full-size pickups continue to top the charts for new-vehicle sales. The Toyota RAV4 is running at 30 days’ supply with an average listing price of $38,403. In full-size pickups, the Ford F-150 remains the top seller with 141 days’ supply and an average listing price of $61,303. Full-size pickup trucks typically run above the industry average days’ supply due to the multiple configurations offered.

JANUARY DAYS’ SUPPLY OF INVENTORY BY BRAND

New-Vehicle Pricing Declines in January

The average listing price for a new vehicle in the latest report was $48,637, down 2.5% from a month earlier and higher by 2.5% compared to last year. However, 81 models on the market are priced at $40,000 and below, and 27 sit below the $30,000 mark. The Mitsubishi Mirage remains the last vehicle with an average listing price under $20,000, with the Mirage G4 priced at $19,526. The next closest competitors, the Nissan Versa, comes in at $20,432 with 106 days’ supply, and the outgoing Kia Forte at $22,086 has 142 days’ supply.

Very much aligned with the average listing price, the average transaction price (ATP) of a new vehicle in the U.S. in January, reported by Kelley Blue Book earlier this week, was $48,641, reflecting a seasonal drop in prices due to fewer luxury brand sales compared to December. In January, new-vehicle sales incentives dropped to 7.2% of ATP, or approximately $3,486. In December, incentives were 8.0% of ATP.