Growing New Car Inventory May Hasten Path to Connected Economy

Bit by bit, chip by chip, the connected economy — the one on wheels — comes into view.

But first, newer cars need to get out on the road.

Recent stats stemming from the automotive industry hint that the high-tech vehicles of today and tomorrow are, well, more available than they’ve been in recent months, which in turn means that the connected car could continue to make inroads in the United States and elsewhere.

U.S. retail deliveries of new cars and light trucks, excluding fleet sales, are estimated by TrueCar to be about 1.01 million units, up 6% from a year ago and an increase of about 3% from July.

Total new vehicle industry sales were expected to reach 1.2 million units in August, up 9% year over year, slightly up from July. By way of contrast, used vehicle sales in August were expected to be down 17%.

Separately, Cox Automotive noted that new vehicle inventory days’ supply held steady in the mid-30s in July, which is nearly a third higher than had been seen in the same period last year. (Although, admittedly, the supply chain picture was significantly more pinched back then.)

None of this is to say that dealers are flush, or that the connected vehicle retailers are either. The pricing picture is still elevated. The Kelley Blue Book new vehicle average transaction price has now hit more than $48,100, an increase of nearly 12% year over year.

Now, if the inventory picture improves a bit (as supply chains unsnarl a bit farther), it’s possible that the pricing picture eases a bit too. But things can be volatile month to month, and in the longer term, the pressures of the paycheck-to-paycheck economy may be a wildcard. But so far, the turn seems to be that consumers are embracing newer models in an environment where the average age of a car on U.S. roads is about 12 years.

In the meantime, online car platforms have been investing in last-mile buildouts. In recent quarterly results, Carvana, for example, saw its retail units sold in the quarter total 117,564, an increase of 9%. It’s boosting its ADESA’s U.S. business, integrating the latter’s existing and potential reconditioning operations.

Elsewhere, CarGurus CEO Jason Trevisan said on an earnings call that the vision is to offer a single point of (connected) contact where consumers can shop, finance, buy and sell.

“For dealers, we will continue to focus on growing engagement on the CarOffer platform and pioneering the digitally enabled automotive market with our digital retail offerings,” he said on the conference call.

The recent data points from the automotive industry at large do not give indications that consumer momentum has shifted decidedly in favor of buying new versus used. But it is the newer vehicle that is “pre-wired” to bring payments, streaming media and all sorts of consumer-level interactions into the mix.