Cars Commerce April Industry Insights Report Reveals New-Car Inventory Up 35% YoY but Remains a Million Units Below 2019 Levels With Prices Up 30% in the Same Time Frame

Rhea-AI Summary

Cars Commerce's April Industry Insights Report highlights key trends in the automotive market. New-car inventory rose by 35% YoY but remains over a million units below 2019 levels. Prices for new cars are up 30% from 2019 but slightly lower by 1.5% YoY, with increased availability of vehicles under $30,000. Used-car prices declined by 6% YoY, but average mileage is up, signaling a complex market adaptation. The EV market sees a 5% drop in new EV prices and a 20% drop in used EV prices. These adjustments aim to balance oversupply with moderate demand growth. Notably, the Toyota Tacoma ranks highly in searches amid full-size trucks, and seasonal trends show increased prices for top-searched used cars.

Positive

• New-car inventory increased by 35% YoY, reducing consumer pressure.
• Introduction of more affordable new cars under $30,000, showing significant market growth in 2024.
• New EV prices decreased by 5% YoY, enhancing market appeal and stimulating demand.
• Used EV prices dropped 20%, increasing attractiveness to cost-conscious consumers.
• Toyota Tacoma maintained high search rankings among full-size trucks, indicating strong consumer interest.
• Seasonal price increases in top-searched used cars suggest consumer willingness to pay premium prices.

Negative

• New-car inventory remains over a million units below 2019 levels, indicating ongoing supply chain issues.
• Used-car market shows an 8% drop in demand, with prices still higher than pre-pandemic levels.
• Average mileage of used cars increased by 4,360 miles compared to April 2019, indicating aging inventory.
• Wholesale values for used cars declined by 16% YoY, reflecting ongoing depreciation adjustments.
• Mainstream used-vehicle prices increased due to higher rental company purchases, narrowing the price gap with luxury models.

Insights

Financial Analyst

The automotive market is showing interesting trends with new-car inventories up 35 year-over-year but still below pre-pandemic levels by over a million units. The average new-car price has slightly dipped by 1.5 year-over-year, landing at approximately $49,111. Importantly, there's a focus on increasing the availability of new vehicles priced under $30,000, which could offer relief to budget-conscious consumers. This increase in inventory suggests improved supply conditions, which could potentially ease the pricing pressure in the longer term.

For used cars, the average price decreased by 6 year-over-year to $28,910, but prices are still significantly higher compared to pre-pandemic levels. This elevated pricing for used cars coupled with their increased mileage reflects ongoing supply constraints and higher market costs. The used car market's 8 drop in demand is noteworthy, as it indicates consumer hesitation possibly due to elevated costs and aging inventory.

The report signals a tentative stabilization in both new and used markets. However, the long-term effect on consumer behavior and market equilibrium will depend heavily on macroeconomic factors, including inflation and interest rates.

Market Research Analyst

The report highlights significant shifts in the electric vehicle (EV) market, with new EV prices dropping by 5 year-over-year to an average of $62,927 and used EV prices falling by a substantial 20. This decline in prices is likely a strategic move to stimulate demand amidst overcapacity. Notably, new EV demand increased by 10, suggesting that lower prices are indeed making EVs more attractive to consumers. However, these trends also reflect the economic uncertainties that still loom over the market.

The narrowing price gap between luxury and mainstream used vehicles is also of interest. Previously luxury used trade-ins commanded 120 more value than mainstream brands, but this premium has now narrowed to 78. This change highlights the market's adaptation to higher prices and shifting consumer expectations.

For investors, these trends offer a mixed bag. While lower prices and increased inventory may attract more buyers and stabilize the market, the underlying economic uncertainties and potential inflationary pressures could dampen short-term consumer confidence.

Automotive Industry Analyst

The automotive industry is undergoing a notable transformation with an evident trend toward stabilization. New-car inventory increases by 35 year-over-year represent a significant recovery, although still short of pre-pandemic levels. This stabilization is further emphasized by the effort to introduce more affordable new vehicles under $30,000, which had the most market share growth in 2024.

In the used-car market, the average vehicle mileage has increased and prices remain higher than pre-pandemic levels. Yet, there is a slight easing in prices, indicating a balancing act between supply constraints and consumer demand. The slight decline in used vehicle inventory by 1.6 year-over-year reflects ongoing challenges in this segment.

The trends in the EV market are also significant. The reduction in new EV prices by 5 and a substantial drop in used EV prices by 20 reflect an attempt to stimulate market demand amidst overcapacity. This strategy appears effective, as evidenced by the 10 increase in new EV demand.

Overall, these insights suggest a period of adjustment and stabilization. For retail investors, understanding these dynamics can provide clarity on the potential opportunities and risks within the automotive market.

Used-Car Market Moderates; Demand Drops 8%, Prices Decline 6%

CHICAGO, May 16, 2024 /PRNewswire/ -- Cars.com Inc. (NYSE: CARS) (d/b/a "Cars Commerce Inc."), an audience-driven technology company empowering the automotive industry, today launched its April Industry Insights Report. Crafted by an expert team of Cars Commerce data analysts, the report provides macro and micro automotive market insights by analyzing supply, demand, pricing and consumer behavior data from across the company's platform, including its flagship marketplace and leading reputation site Cars.com®, digital solutions and website provider Dealer Inspire, and trade-in and appraisal technology provider AccuTrade.

"The last five years have been highly volatile for auto, yet a pattern of stabilization is emerging," said Rebecca Lindland, senior director of industry data and insights at Cars Commerce. "We are navigating through a new normal, where vehicle costs are substantially higher and the mix of availability by price point has shifted. The recovery in more affordable new cars below $30,000 offers a silver lining, providing relief for consumers. As the market stabilizes month over month, we remain optimistic that the worst may be behind us."

Key April Market Highlights

As of April 2024, the automotive industry is experiencing significant shifts across new, used and electric-vehicle sectors, signaling a move toward greater stability and consumer choice. Prices, consumer demand, inventory supply and turnover leveled off, establishing a new standard for the industry and consumers. To download the full report, visit www.CarsCommerce.inc.

• Gradual improvement in new inventory and consumer demand: The average new-car price remains stable at approximately $49,111, down slightly by 1.5% year over year — although prices are higher than before the semiconductor shortage, there's a notable effort by automakers to introduce more vehicles priced under $30,000, which have seen the most market share growth so far in 2024. As new-car inventory levels increase by 35% compared to 2023, consumers are experiencing fewer pressures to compromise on their vehicle choices. This reflects a market adapting to improved supply conditions, although total inventory still trails pre-pandemic levels by over a million units.
  
  
• Aging inventory with elevated costs: In April 2024, used cars averaged 59,693 miles, marking an increase of 4,360 miles compared to April 2019. Despite a slight year-over-year 6% decrease (-$1,958) in prices, the average cost remained elevated at $28,910 compared to April 2019, when the average price was $21,639. This shift reflects in the cost per 1,000 miles, which rose from $391 ($0.39 per mile) in April 2019 to $484 ($0.48 per mile) in April 2024, reflecting a gradual easing but still higher costs than pre-pandemic levels. Consumers are paying an additional $93 per 1,000 miles on average compared to 2019 and $119 more at the peak of market prices. Used inventory slightly declined by 1.6% year over year, coupled with a decrease in consumer demand, suggesting ongoing challenges but also a gradual stabilization. As the market adapts, both buyers and sellers are adjusting to a landscape shaped by the trickle-down effect of high new-car prices.
  
  
• Trade-in and wholesale market trends: Pre-pandemic, luxury used trade-ins commanded 120% more value than mainstream brands, but today, the difference has narrowed to 78% as mainstream prices have surged. After a brief spring recovery, wholesale values dipped again in April (-1.2% MoM, -16% YoY), with both mainstream and luxury models experiencing similar declines, indicating ongoing depreciation adjustments. Additionally, increased purchases by rental companies drove up mainstream used-vehicle prices, contributing to the narrowing price gap between luxury and mainstream segments.
  
  
• EV market response to overcapacity: The EV market is seeing a significant increase in inventory that has led to some oversupply, prompting a 5% reduction in new EV prices year over year to an average of $62,927. This price adjustment aims to stimulate demand in a segment that is still growing but at a moderate pace due to economic uncertainties. And it's working: Demand for new EVs is up 10% YoY. The used EV market has responded with a substantial 20% drop in prices, enhancing its appeal amid cost-conscious consumer behavior.

Additional noteworthy April insights:

• Toyota Tacoma punches above its weight In top searches amid full-size trucks: In a market heavily skewed toward full-size trucks, it secures a spot in the top 10 vehicle searches as the only mid-size truck in a highly competitive segment. This achievement is particularly striking given the introduction of new models in the mid-size truck category, all sporting the latest designs and features. Yet the Tacoma not only holds its ground, it's also set to enhance its appeal with the upcoming introduction of a hybrid engine — a first in its class — promising increased power and improved fuel economy.
  
  
• Seasonal trends in top-searched used autos: In April, the top 10 most searched used cars saw a seasonal price increase. The average price for all top 10 models rose month over month, with the Porsche 911 experiencing the largest increase and the Chevrolet Corvette the smallest.

 

New-Vehicle Supply, Demand and Pricing* April 2024
Supply  (YoY)	Demand  (YoY)	Price (YoY)
34.6 %	-22 %	-1.5 %

 

Used-Vehicle Supply, Demand and Pricing* April 2024
Supply  (YoY)	Demand  (YoY)	Price (YoY)
-1.6 %	-7.8 %	-6.3 %

 

New-EV Supply, Demand and Pricing* April 2024
Supply  (YoY)	Demand  (YoY)	Price (YoY)
99.7 %	10.5 %	-5.1 %

 

Used-EV Supply, Demand and Pricing* April 2024
Supply  (YoY)	Demand  (YoY)	Price (YoY)
42.2 %	44.6 %	-20.2 %

 

*Inventory, searches and list price on Cars.com

ABOUT CARS COMMERCE
Cars Commerce is an audience-driven technology company empowering the automotive industry. The Company simplifies everything about car buying and selling with powerful products, solutions and AI-driven technologies that span pretail, retail and post-sale activities – enabling more efficient and profitable retail operations. The Cars Commerce platform is organized around four industry-leading brands: the flagship automotive marketplace and dealer reputation site Cars.com^®, award-winning technology and digital retail technology and marketing services from Dealer Inspire, essential trade-in and appraisal technology from AccuTrade, and exclusive in-market media solutions from the Cars Commerce Media Network. Learn more at www.carscommerce.inc.

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SOURCE Cars Commerce

FAQ

What are the key highlights of Cars Commerce's April Industry Insights Report?

The report reveals a 35% YoY increase in new-car inventory, a 6% decrease in used-car prices, and notable trends in the EV market, including a 5% decrease in new EV prices.

How has the new-car inventory changed according to the April 2024 report?

New-car inventory increased by 35% year-over-year but remains over a million units below 2019 levels.

What is the current trend in new-car prices according to CARS?

New-car prices are up 30% compared to 2019 but have decreased slightly by 1.5% year-over-year.

How has the used-car market adjusted in April 2024?

Used-car prices declined by 6% year-over-year, and average mileage increased by 4,360 miles compared to April 2019.

What significant trends are seen in the EV market as per the report?

The EV market shows a 5% drop in new EV prices and a 20% drop in used EV prices, aiming to balance oversupply with moderate demand growth.

How did consumer demand for used cars change in April 2024?

Consumer demand for used cars dropped by 8% year-over-year.

What impact has the new inventory had on the automotive market?

The increased inventory has reduced consumer pressure to compromise on vehicle choices and indicates market adaptation to improved supply conditions.

What changes are seen in the trade-in and wholesale market trends?

Wholesale values declined by 16% YoY, and mainstream used-vehicle prices increased due to higher purchases by rental companies.