Colorado auto dealers are finding they can't sell what they don't have — inventory shortages are holding down sales and that isn't likely to change until almost year's end.
The number of new vehicles registered last month in El Paso County was nearly flat, down less than 1% from July, to 2,246, though the total was still down 13.1% from a year earlier, according to data provided to the University of Colorado at Colorado Springs Economic Forum by Colorado Interactive. Buyers have up to 60 days to register a new vehicle, so the September numbers likely reflect sales made in July. Registrations in the county during the first nine months of the year are down 18% from the same period a year ago.
Registrations peaked in July at 2,439 and fell in August to 2,264 as dealers said they couldn't get enough cars to meet demand since manufacturers were shut down early in the COVID-19 pandemic and have yet to catch up with demand, said Tim Jackson, president of the Colorado Automobile Dealers Association. Since manufacturers are still struggling to catch up, they aren't offering as many incentives, such as rebates and financing deals, he said.
"The factories being closed for two months has left dealers with about 10% of their normal inventory and that continues to impact new vehicle sales," Jackson said. "Manufacturers will eventually catch up with demand, but it hasn't happened yet. Inventory levels probably won't return to normal levels for another two or three months, which puts us at the end of the year before we see a normal market."
Kevin Shaughnessy, vice president of operations for Phil Long Dealerships, said inventory issues "remain a concern" for many dealers across the state, but Long and other dealerships have been buying unsold vehicles from other dealers to have cars and trucks to sell. He doesn't expect the supply of vehicles for sale to return to normal until early next year.
Statewide, the new vehicle market continues to improve as it seeks to shrug off the shutdown of many dealer showrooms in April. The number of new vehicles registered in Colorado during July and August rose 16% from the total for June and July to 37,168, the highest two-month total since February and March, according to the dealer group. The total for July and August was still down 12.7% from the same period a year ago with passenger car registrations off 35% and light truck registrations (which include pickups, vans and sport-utility vehicles) down 6.5%.
Statewide registrations through August were off 16.5% to 139,717. That's still better than the rest of the nation — U.S. vehicle sales were off 19.8% during the same period.
Colorado's used vehicle market is recovering faster than the new car market, likely due to ample supply. Statewide used vehicle registrations in July and August were down 6% to 40,672. Used vehicle registrations for the first eight months of the year were off 18.1% to 138,812. The numbers reflect used vehicles that are 7 years old or newer.