New car and light-truck inventories, undermined by production cuts in wake of the microchip crunch, fell under 900,000 units in March, LMC Automotive and J.D. Power said, and have been stuck below 1 million since last summer.
The dearth of new cars and light trucks, combined with record low incentives, continues to drive vehicle prices to record highs.
The average new-vehicle incentive is on pace to reach an all-time low of $1,044 in March, LMC and J.D. Power said, a 69 percent decrease from a year ago. One of the leading contributors behind the sharp decline in incentives is the lack of lease deals as factory subvention eases. Leases accounted for 30 percent of all new vehicle retail sales in 2019 but will account for just 18 percent of March retail volume, LMC and Power said.
Average transaction prices are expected to reach a March high of $43,737, a 17 percent increase from a year ago, LMC and Power predict. First-quarter average transaction prices are forecast to reach $44,129, an 18 percent increase from the first three months of 2021.
Some consumers are waiting on the sidelines until availability and pricing improves, or shifting to the used-vehicle market.
Three brands — Kia, Lexus and Toyota — have a 20-day or less supply of new vehicles this month, Cox Automotive said. At the other end of the availability spectrum, Buick, Jeep , Audi, Volvo and Ram had a 50 to 60-day supply of vehicles, less than the industry’s longtime norm of 65.
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