For Optimal Car-Buying Analysis, Local Markets
Matter
By Jason Jordhamo, Product Management Director, S&P
Global Mobility
In this
October edition of the Polk Auto Marketing Monitor, we dive
into the industry's current inventory build-up at the DMA level and
look at the markets and vehicle types that are outpacing the
industry, leading to increased supply and competition for buyers in
key regions around the US. Incentives are climbing to support
moving this excess supply off of lots, so dealers in these regions
will need to pay particular attention to their audience targeting
strategies and the offers they're providing to attract buyers
through year's end.
Top 50 DMAs added nearly 750,000 units versus last
year
The top 50 designated market areas (DMAs), representing 72% of
the US market, have seen a striking shift in new model retail
advertised inventory, with year-over-year increases in these areas
of over 50% in August 2024, raising the average available inventory
to nearly three months.
This inventory surge continues to outpace demand across
mainstream and luxury vehicles and across fuel types, with luxury
and gas models accounting for the largest increases (Figure
1A-B). However, electric vehicles (EVs) continue to lead
in total monthly inventory, although their growth rate from last
year has been just 6%. Dealers have successfully used leasing and
incentives to move their EVs off the lot.
Midwest markets have some of the largest
increases
Eight DMAs — representing 7.7% of the total US vehicle
market — have experienced an average monthly inventory increase
of more than 60% (Figure 2). Another 10 markets
have seen their average monthly inventories rise 50-60%.
Altogether, these 18 DMAs represent 21% of the US share, with
supply increases exceeding 50% compared to a year ago. The Midwest
region is home to 7 of these 18 markets, where dealer inventories
have surged. There are also several major DMAs experiencing 50-60%
increases.
Luxury inventory gains everywhere: From 18% to
122%
Even though inventory growth continues to outpace demand, new
registrations have risen compared with last year, with the
exception of the luxury segment which experienced a slight decrease
of just one percent year-over- year for the month of August.
Additionally, every DMA in the top 50 experienced a double-digit
average monthly inventory increase for luxury vehicles; many saw an
increase in the high double digits.
- Four DMAs saw luxury monthly supply growth hit triple digits:
Raleigh-Durham (122%), Harlingen-Waco (111%), Milwaukee (104%) and
Detroit (100%). - Five additional DMAs had monthly increases over 70%: Dallas-Ft.
Worth, Houston, Cleveland-Akron, Boston and Providence – New
Bedford. - Thirty DMAs had increases over 50%.
EV supply/demand challenge improving
As the industry knows well, EVs continue to accumulate on dealer
lots, leading the industry with an average 3.4-month supply. This
challenge persists in markets like Indianapolis (up 101%);
Columbus, OH (up 67%); Detroit (up 65%) and Cleveland-Akron (up
54%). However, leasing and attractive incentives are boosting
demand across much of the country, narrowing the gap between
monthly supply (up 61%) and demand (new registrations up 51%).
- Fourteen DMAs have reduced EV monthly supply
- Denver EV supply is down 35% from 2023 and under 2 months.
- Declines in Seattle (30%), Harlingen-Waco (27%) and Miami (5%)
brought these three markets to below 2.5-months' supply.
Impact to dealer marketing
For dealer groups, strategic, data-informed marketing is
essential to reach in-market shoppers and drive sales. As inventory
levels fluctuate across fuel type and segment, so too do pricing
and demand dynamics. With increased inventory and competition,
dealers must differentiate themselves through targeted audience
strategies and offers to attract buyers. Highlighting leasing deals
and incentives becomes crucial in driving sales, particularly for
EVs and luxury vehicles. Understanding these trends will lead to
better-informed marketing decisions.
Polk Auto Direct helps dealers and their marketing partners
find and target the best households for in-market shoppers across
EV, hybrid and gas fuel types.
Learn About Polk Auto
Direct
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