On a good day, car dealers can bend time.
Ever wonder why you start seeing ads for next year's models several months early? Thanks to creative release dates, the industry has historically sold tomorrow's more profitable vehicles today as summer turns to fall. But that chronological magic is starting to fail, and they're increasingly being forced to sell yesterday's cars tomorrow.
In the decade since the recession, dealerships have started to find themselves in a pickle come September, leaving them struggling to get rid of current-year models as the next-year iterations arrive. The inventory glut is largely a function of misplaced optimism as American automakers ramped up production over the past few years. And in the coming months, that imbalance will worsen, as demand for new vehicles dips for the first time in almost a decade.
"I don't think they understand the gravity of the situation," said Edmunds.com analyst Ivan Drury. "This is becoming a chronic, real issue."
In the fourth quarter of 2017, only 46 percent of new vehicles sold in the U.S. were shiny new 2018 models, compared with 73 percent a decade ago, according to Edmunds.com. To make matters worse, the stale products spilled over. In the first quarter of this year, almost one in five vehicles sold in the U.S. was an older model — a 2017 or even 2016. That's almost double the level from 2008.