Auto Inventories Drop 192M in December

Ford (74 days), Chrysler (79 days) and General Motors (81 days) combined had 78 day’s supply at the end of December. As a group this is 16 days lower than November’s totals but is 7 day’s supply higher than one year ago.

The Asian transplants had 54 days supply down 10 days from the 64 day’s supply reported at the end of November. The Asian transplants had 5 more day’s supply than at the end of December 2012.

The European transplants had 48 days supply at the end of December or, 11 days less than November and 2 more day’s supply than at the end of December 2012.

According to Bank of America Merrill Lynch Research automotive analyst John Murphy, “The decline in supply should alleviate concerns about the recent uptick in inventory levels, as holiday season demand and annual shutdowns have reduced total industry inventory to a more normalized level. Additionally, we believe the reduction in days’ supply further illustrates the prudence and flexibility of automakers when matching supply to demand. On the whole, we believe the industry is well positioned heading into 2014 and we expect demand growth will continue to be aided by improving consumer confidence and new product launches.”

The growth trend is for more light trucks than passenger vehicles which is good news for automakers but also the steel mills, as there is more steel in a truck than a car.

The forecast for automotive is an increase in sales of 3-4 percent for 2014 as units sold should exceed 16.0 million vs. approximately 15.6 million during 2013.