U.S. public auto dealers: Low inventory will linger

Penske Automotive Group Inc. had 2,500 new vehicles, or a nine days’ supply, in the U.S. at the end of March, one day better than at the end of December. That compared with 14,900 new vehicles, a 37-day supply, in the U.S. a year earlier.

Some brands were leaner than others, Penske leaders said. For instance, the retailer’s U.S. Honda inventory dwindled to 216 new vehicles at the end of March from 3,700 a year earlier. It had just 188 new Toyotas in the U.S. on March 31, compared with 2,500 a year earlier.

CEO Roger Penske said last week that he expects “a slight increase” in new-vehicle allocations from some automakers in the second quarter, including a roughly 10 percent boost from Mercedes-Benz.

Penske CFO Shelley Hulgrave last week told analysts, “We continue to sell into our future new-vehicle pipeline to support our customers, maximize inventory turn and minimize our inventory costs. We expect the current supply challenges, coupled with strong demand, to keep our new-vehicle supply at low but manageable levels for at least the next nine to 12 months.”

Penske’s used-vehicle supply in the U.S. was 34 days on March 31, down from 43 days on Dec. 31.

Group 1 Automotive Inc. CEO Earl Hesterberg told analysts last week that consumer demand “remains extremely strong exiting the first quarter, and we continue to sell most units almost immediately after OEM delivery. This dynamic should continue throughout the year.”

Group 1’s supply of new vehicles in the U.S. on March 31 was unchanged from Dec. 31, at nine days, but it was a sharp drop from 34 days as of March 31, 2021.

The retailer had 3,100 new vehicles in stock in the U.S. at the end of March, said Daryl Kenningham, president of U.S. operations.

The retailer’s U.S. used-vehicle supply stood at 28 days as of March 31, down from 36 days on Dec. 31.