Retail advertised inventory data for December 2023: S&P Global Mobility delivers the following insights regarding the US market.

Overall industry inventories

Overall available new vehicle dealer inventory listings for the US market have increased to about 2.3 million units as of early December. This represents an increase of 4% from the end of October and a 60% year-over-year increase from 1.4 million units. The November surge was mostly driven by the Compact SUV segment (more detail below).

EV inventories stabilizing

Retail advertised inventories of most non-Tesla electric vehicles have flattened after an early-2023 rise, with two exceptions: the Ford Mustang Mach-E and Ford F-150 Lightning have seen spikes to have the No. 1 and 2 highest EV unit counts in the US market. After a strong sales month in October, Ford F-150 Lightning inventory nonetheless jumped in early December by 2,000 units to almost 12,000 vehicles and has surpassed the VW ID4 in units on dealer showrooms. Ford announced on Dec. 11 it was cutting Lightning production by half - with weekly production down to 1,600 units from 3,000. As for Mach-E, dealer advertised inventories appear to be flattening at nearly 25,000 units after sharp increases every month since April. Another recent rise: Chevrolet Bolt EV and EUV inventories are up almost 19% up month-over-month.

Are car prices coming down?

An S&P Global Mobility analysis of advertised vehicle prices showed a peak average MSRP of advertised inventory in July 2023 at $53,495. The number has since retreated to $51,704 as of early December. This is likely based on builds of more-affordable trim levels in the model mix to counter high interest rates.

The ratio of vehicles actively listing an advertised price below MSRP has risen from 19% in July 2022, up to 35% in early December. What's more, the average distance from MSRP has continued to grow - currently at a market-low of $2,739 below MSRP; this time last year, it was $1,191 (see below). This could, however, include manufacturer incentives such as Detroit-brand A-Plan listings. Side note: Nearly 4% of new vehicles are still advertised above MSRP.

The Compact SUV battleground

Small SUVs are the largest-volume segment, and some automakers are going big with increased production filling the pipeline. After a summer selldown for many brands, compact SUV dealer-advertised inventories have surged at year's end.

Inventories of the Chevrolet Equinox have tripled since May, while Nissan Rogue and Mazda CX-5 inventories have doubled since July. But the biggest numerical jump is from the Toyota RAV4, which was neck-and-neck with the Honda CR-V at around 20,000 units in April, but dealer advertised inventories are now approaching 50,000 vehicles. And yet, both the RAV4 and CR-V have about 30 days' supply. As for Rogue, while it had a strong fiscal year-end sales month in March, and quarter-end in June, retail sales volumes have been softer in other months and are not supporting the inventory increases. All this increased volume points to potential incentives increases in coming months as the Japanese fiscal year-end approaches.

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This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.