Amid the microchip shortage, new-vehicle inventory continues to be limited, and many publics are heating up used-vehicle inventory sourcing and sales.
Sonic President Jeff Dyke told Automotive News last week that its days supply of new vehicles has slipped even lower since the quarter ended June 30 to "probably a nine-day supply, somewhere in that ballpark." Supply of new BMWs — Sonic has 15 BMW stores — stood at eight days, Dyke said. Honda supply was even tighter at six days.
"I do think that July is going to be the bottom of the barrel and things will progressively get better as we march towards the end of the year," Dyke said, adding that high-line brands, such as BMW, should recover faster than domestic brands.
Penske CEO Roger Penske in an interview last week said the retailer had a 19-day supply of new vehicles in the U.S. at the end of the second quarter. Supply of new Toyotas was at four days, he said, and the Tundra pickup was extremely tight.
Production snags go beyond chip scarcity, he said.
"Even the truck tires now are becoming an issue," Penske said.
July and August will be "the toughest" months, and then he's hoping for some normalization on the microchip shortage, he said.
With low new-vehicle inventories and high wholesale used-vehicle prices, Group 1 has largely avoided auctions while being "aggressive" in its used-vehicle sourcing strategy, said Daryl Kenningham, the retailer's president of U.S. operations.
"In June, we sourced over 3,000 used vehicles from our service departments and through individual purchases," Kenningham said.