Monthly inventory/sales ratio in the U.S. auto industry 2009-2023

In April 2023, the U.S. automotive industry's inventory-to-sales ratio decreased compared to March 2023, reaching 0.65. This was however a slight uptick compared to February's inventory-to-sales ratio, which stood at 0.62.

Chip shortage impacts supply

The inventory/sales ratio reported in February 2022 was a record low for the United States' automotive sector, lower than the ratio one month earlier, in January 2022. The ratio slumped when U.S. vehicle sales began to gain steam and supply remained low amid shortages of automotive parts, most notably microchips. In contrast, the inventory-to-sales level rose to its highest in January 2009 amid the 2008/09 financial crisis, reaching about 4.6.

High demand but low consumer satisfaction

The impact of the shortage is not just felt by dealerships but also impacts consumers' car buying experience. Around 48 percent of U.S. consumers intended to buy a car as of March 2022, but this demand is faced with higher-than-expected prices and a limited vehicle selection due to the chip shortage. Car buyers' satisfaction with their overall shopping experience had dropped in 2021 after being at its highest since 2016 during the early stages of the COVID-19 pandemic. This discontentment with the car buying process is another challenge for car dealers.