Inventories Continue to Climb, Creating More Pressure for Auto Marketers

Welcome to the Polk Auto Marketing Monitor on LinkedIn, a newsletter designed specifically for automotive marketers. Each month we will deliver a curated collection on the latest automotive trends and insights from S&P Global Mobility experts and the impacts they bring to automotive sales and marketing.?

In this issue, we highlight the industry’s recovery and look at the Q2 retail sales and inventory trends that will shape messaging and targeting strategies for the rest of the year.? We also just posted our new vehicle launch guide for download (see link at the end).

-? Joe Kyriakoza , VP and GM, Automotive Marketing Services, S&P Global Mobility

As we delve into the current landscape, one striking trend emerges: the recovery of new vehicle registrations and dealer inventories are moving in the same direction but at different speeds.

Consider this:

• 13 of the last 14 months saw year-over-year increases in new vehicle registrations.?
• 29 out of 45 OEM brands (64%) saw year-over-year registration increases in April.
• At the same time, retail advertised inventory stood at 2.79 million vehicles by the end of May—a 61% surge compared to the same period last year (Figure 1).

There's also a notable shift in inventory dynamics. The average vehicle inventory age has risen significantly, now averaging 74 days—an increase from 55 days a year ago. Pickup trucks and EVs are the segments occupying most of the lot space:

• Full-size ? to 1-ton pickups are leading the age bracket at 91 days, followed closely by electric vehicles at 90 days.
• Full-size half-ton pickups are also above the national average at 78 days.

This aging trend underscores the need for agile marketing strategies that address evolving consumer preferences amidst changing inventory dynamics.

Continue reading for more industry data and marketing insights from the Polk Automotive Solutions team at S&P Global Mobility.

Competitive Pricing Landscape Demands Attention

In light of these registration and inventory developments, precision in audience targeting becomes paramount. Marketers can leverage data and consumer insights to identify and engage with specific buyer personas effectively. Understanding regional preferences, demographic trends, and economic factors will enable marketers to craft personalized campaigns that resonate with target audiences.

Here are the leading models contributing to current pricing discounts:

• The average advertised discount on US inventory has surpassed 6% of MSRP and reached $3,149 at the end of May, up $1,000 from a year ago.
• EVs lead again with an average discount of $5,109.
• At the segment level, full size half ton pickups had the highest average advertised discount at $4,746, while the compact car was lowest at $1,393.

These numbers underscore the importance of understanding competitive pricing strategies that attract and retain customers amidst heightened market levels.

Impact of New Vehicle Launches

Compounding the surge in inventory is the imminent wave of new vehicle launches. S&P Global Mobility anticipates over 130 new vehicle introductions over the next 24 months, with more than half of these models featuring electrified powertrains.? The arrival of more electric vehicles across every mainstream and luxury brand coupled with increasing demand for hybrid powertrains means marketers will have to manage more customer types, vehicle types, price points and buying motivations than ever before.

Auto marketers who tailor their strategies to appeal to diverse consumer segments with various purchasing motivations will be best positioned to move their inventories—whether they be EVs, hybrids, or ICE vehicles.

Get the latest launch timelines with our 2024-2025 Vehicle Launch Guide and see all the planned activity by body type, nameplate, class and fuel type, here:

Download the new 2024-2025 Vehicle Launch Guide >

Learn more: