U.S. automakers and dealers added a quarter of a million unsold vehicles to stocks during October. That's normal early in a new model year, but some analysts see automakers preparing to launch year-end incentive flurries.
Inventory rose 8 percent to 3,588,600 units during October from the previous month. That's higher than in the five months before.
Based on how long stocks would last at October's sales pace, the industry started November with a 76-day supply, up from 64 days on Oct. 1. That was slightly above the 10-year average of 73 days for Nov. 1.
Analyst David Lim of Wells Fargo expects a strong finish to the sales year. Automakers "are poised to end the year on a high note," he wrote to clients. "We expect a strong December as [automakers] look to capitalize on the favorable consumer environment and achieve year-end and quarterly goals."
On Nov. 1, several major automakers carried more stock than the industry average 76-day supply, led by General Motors at 94 days. Ford Motor Co. started November at 88 days; Hyundai-Kia and Fiat Chrysler Automobiles were at 84 days, and Nissan North America was at 78 days.
Even the major players below the industry average were carrying larger stocks than normal: Toyota Motor Sales at 55 days, American Honda at 68 and Volkswagen Group of America at 75. That suggests that those automakers have plenty of stock if they opt for an incentive blitz.
So do most luxury brands, which often jockey for position at year-end. BMW and Mercedes-Benz are locked in another close battle for the title of best-selling U.S. luxury brand. Their stocks are close to normal levels, but both beefed up supplies during October. So did No. 3 Lexus.