Even if the worst is over or close to it, dealers also recognize that shortages are likely to persist for the long term.
Penske CEO Roger Penske said he expects them to last "at least the next 12 months." Penske dropped to a 12-day supply of new vehicles in the U.S. at the end of September. For some brands, inventory was even tighter.
"We're running in the single digits on volume foreign, which is our Toyota, Honda, Nissan, Hyundai-type businesses," Penske spokesman Anthony Pordon said. "That is something that we are working with the manufacturers to manage every single day."
AutoNation's Jackson said he doesn't expect consumer demand to lessen anytime soon and that the supply-demand imbalance will last into 2022 or "maybe even 2023." Production increases won't show up in inventory right away, said Jackson, whose successor, former Fiat Chrysler Automobiles CEO Mike Manley, begins Nov. 1.
AutoNation, the largest U.S. new- vehicle retailer, was down to a lean 10-day supply of new vehicles as of Sept. 30, with just 8,041 cars and trucks on hand. That figure was five times higher at the same point in 2020, according to a regulatory filing.
Jackson told analysts that inventory had dropped even lower to a range of 5,000 to 6,000 vehicles by late October and that AutoNation was booking sales on vehicles well into its order pipeline.
Asbury Automotive Group Inc., which had a 12-day supply of new vehicles at September's end and into October, expects inventory constraints to remain "well into 2022," Senior Vice President of Operations Dan Clara told analysts last week. The company's new-vehicle supply target is 70 to 75 days, according to a regulatory filing.