The United Auto Workers (UAW) union has been on strike for three weeks. But walk into the average new car dealership, and you’ll see no sign that anyone has stopped building new cars. Dealers are relatively flush with new vehicles to sell.
Car dealers measure their supply of new cars to sell in a metric they call “days of inventory” – how long it would take to sell out at the current sales pace if they couldn’t get more. An old industry rule of thumb tells them to maintain about 60 days, roughly the level of inventory at which your local dealer probably has the combination of features and colors you want in easy reach.
The nationwide average supply today is 60 days, according to Kelley Blue Book parent company Cox Automotive.
That’s the highest level of inventory since early spring of 2021.
Some Brands Are Stocked Better Than Others
The story changes from brand to brand.
Just three companies are impacted by the strike – Ford, General Motors, and Stellantis (the new name of Chrysler, Jeep, Ram and other brands).
GM is the most threatened by inventory problems. Its Chevrolet flagship brand is a little under average, at 57 days. Its Cadillac luxury division has just 46.
Ford dealers, meanwhile, sit on an average 88-day supply. Chrysler dealers have 127. Jeep has 103, and Ram has 108. Stellantis’ Dodge brand leads the industry with 142, perhaps leaving Dodge dealers unusually open to price negotiations.
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Big Three Are Stockpiled for a Strike
For striking workers, the news is sobering. A strike can be seen as a contest to see which dwindles first – the strike fund from which the union pays striking workers or automakers’ backlog of products to sell. Either side could be pressured into an unsatisfactory settlement by economic need.
But the union has adopted an innovative tactic, striking only a few plants and adding more each Friday without a contract settlement. That means UAW workers are still building many models for the Detroit Three.
The union’s next target may well be GM’s largest SUVs. The Chevrolet Tahoe and Suburban, which generate enormous profits for GM, have inventory under 30 days’ supply. Likewise, the Cadillac Escalade models have only a 30-day supply.
Import Dealers Are Less Well-Supplied, But Facing No Strike
Many foreign brands have lower supplies, but their workers aren’t unionized and can’t strike. Honda, Toyota, and Kia are all in the low 30s, with Subaru, Lexus, and Hyundai below the national average.
However, low inventory at import brands may lend the UAW some leverage. The UAW strike against the Detroit automakers could have allowed competitors to grab sales and market share. However, competitors have scant inventory.
