New-Vehicles Coming Under Pressure as Prices Remain Elevated and Threatened Tariffs Loom; Days-to-Move Reaches Five-Year High of 80 Days

GRAND RAPIDS, Mich., Feb. 6, 2025 /PRNewswire/ -- New vehicle sales velocity continues to wane as average days-to-move hit 80 days, a five-year high. In addition, vehicle turn rate remained flat at 35%--near pre-pandemic lows--for the fourth consecutive month. The findings are part of Cloud Theory's monthly automotive industry report "On the Horizon" released today.

New vehicle inventory fell to 2.96 million units in January 2025. This is down from 3.23 million units in December 2023, but up year-over-year from 2.54 million units in January 2024. While average marketed prices for new vehicles saw a seasonal dip to $49,500 in January 2025, it has hovered near or above $50,000 for more than a year.

"While some of this month's trends can be attributed to normal seasonal patterns, there is a longer-term and underlying dynamic that is pointing to a more challenging sales environment," said Rick Wainschel, Vice President of Data Science and Analytics for Cloud Theory. "The effects of ongoing price premiums and longer sales periods should be on every manufacturer's radar screen. And, if the tariff situation moves from threats to reality, these marketplace issues may shift from worrisome to problematic."

With expensive vehicles sitting on lots longer, manufacturers and dealers are more likely to turn to incentives to move metal. The average marketed discounts on dealer websites in January 2025 was up by 33% to $1,953 compared to January 2024.

Lexus, Toyota Lead Inventory Efficiency Index Race

Toyota Motor Company brands continue to lead the way on Cloud Theory's patent-pending Inventory Efficiency Index which provides a real-time view of market-relevant supply and demand for all makes and models and across all geographies.

Lexus leads the index with a score of 377.6, followed by Toyota at 256.3. It is noted that both brands have experienced sharp declines in inventory. Toyota's in-stock supply in the marketplace is down 13% compared to January 2024, and Lexus' drop is particularly steep—down 63% from a year ago.

"With pricing currently being such a key issue in the automotive marketplace, it is important to note that makes with higher Inventory Efficiency Index scores have an advantage in being able to promote and command premium values," said Matt Sharp, Chief Digital Officer and General Manager, Cloud Theory. "Whether it is due to supply shortages or inherently strong brand power – or both – those makes are better able to weather the storm if prices remain elevated. But all OEMs should be aware of the larger macro-dynamics that are in place and make informed investment decisions that take them into account."

The Inventory Efficiency Index determines scores for vehicle makes or models based on relative inventory and movement data compared to competitors.

• A score of 100 means that an OEM's demand is in balance with its relative supply in the marketplace.
  
  
• A score above 100 indicates that a make or model is selling its inventory more efficiently than average.
  
  
• A score below 100 means that there are opportunities to bring demand into better alignment with supply (or vice versa).

About Cloud Theory    

Cloud Theory is more than a concept. It is the eye of the storm, where cutting-edge data, software, and artificial intelligence meet deep industry knowledge and experience. Built for automotive manufacturers, agencies, and affiliates, Cloud Theory enables our customers to understand – in real time – the complex competitive world in which they do business and to make bold decisions that drive them forward. The combination of billions of data points, interactive tools, and expert consulting gives our clients the ability to weather any storm and find their way to clear blue skies. Learn more at cloudtheory.ai. To learn more about our entire portfolio of automotive brands, visit www.advancelocalautomotive.com. 

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SOURCE Cloud Theory