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May 9, 2022

US inventory levels rising slowly

Lean inventories still a problem in US, but there are signs of easing and Q1 production in North America exceeded forecasts.

By David Leggett

GlobalData unit LMC Automotive reports that there was some easing in April of the low inventory problem in the US – caused by parts shortages – that has constrained vehicle sales so far this year.

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The US light vehicle market in April reached 1.26 million units sold, a 17% YoY decline, but volumes were up by about 5,000 units from March. Moreover, the annualized rate of sales grew to 14.7 million units, about 1.3 million units more than in March.

LMC said that April had the same 27 selling days as March, but it is traditionally a weaker month. Yet, slightly better inventory levels and some recovery in fleet sales helped OEMs to sell 300 units more by selling day.

In the first four months of 2022, light vehicle sales in the US totalled 4.55 million units, down by 16% from a year ago. This volume is also down by 14% from 2019, but up by 8% from 2020, when the pandemic was already impacting sales negatively.

LMC expects constraints on demand to be with the industry into 2023. The outlook for 2022 remains at 15.3 million units after being revised downward last month.

On the upside though, Q1 North American production came in about 75,000 units higher than LMC’s forecast, which it said ‘is well received news for some supply recovery’.

LMC’s US sales forecast for 2023 is also unchanged, at 16.5 million units, an increase of 8% from 2022. High transaction prices and rising interest rates are headwinds to a further recovery in the market, it said. Moreover, risk of a further economic slowdown or even a recession has increased, as ‘the Fed walks a tight rope in managing inflation’.

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Innovation remains a necessity in a disruptive ecosystem, as continuous innovation allows companies to adapt, evolve, and grow through disruption. Using our in-house alternative datasets, we are excited to launch GlobalData’s Innovation Scorecard. This scorecard will allow clients to rank 3,500+ companies on their innovation activity, impact, and disruptive potential across geography, sector, and theme. The scorecard provides a data-driven framework to rank leading companies on the potential of their intellectual property (IP) portfolio. GlobalData’s Innovation Scorecard focuses not only on the activity of innovation in the organization but also on its impact and disruptive potential using the 3I framework: Intensity, Impact, and Ingenuity. The tool helps clients to identify the most innovative companies that are disruptive leaders and challengers and can create alpha for their portfolio using the insights driven by 19+ high-value KPIs. Download our report to find out more about this innovative tool. Key findings derived from this tool include:
  • Alphabet, Tencent, and Qualcomm are the top three innovative companies in the last 10 years
  • The scorecard finds Technology & Communications and Pharma & Healthcare as the two main sectors driving innovation
  • Loreal placed as ‘Disruptive Leader’ in the Consumer sector, while Revlon has been identified as a traditional laggard
  • Companies such as Etsy and H&M are challenging retail ‘Disruptive Leaders’ Amazon and Walmart
by GlobalData
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