This year is expected to be the best for domestic new car sales since 2006, the year before the recession began. The increase in buyer activity has been large enough that several car and light truck brands are virtually out of stock. These are a mix mostly of extremely expensive cars and very inexpensive ones as heavy demand appears to be concentrated at both ends of the market. 24/7 Wall St. has compiled a list of the most oversold vehicles during November.
Domestic car sales in 2005 and 2006 were above 16 million each year. Sales dropped below 9 million in 2009. This year, major car companies and automotive research firms expect U.S. vehicle sales to be nearly 13.5 million. While that does not approach the industry’s best years, car manufacturers have cut enough out of their factory and worker costs that most can now make money at the 13 million annual sales level.
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Most years, a few car models are in short supply. This is because either a manufacturer underestimates demand or there is an interruption in supply because of manufacturing problems. This year, heavy demand appears to be concentrated among those who want inexpensive and fuel-efficient cars at one end, and those consumers for whom price and gas mileage are not much of a consideration.
The industry measurement of car supply is “days to turn,” or “days on the lot.” This is defined as the average number of days vehicles are in the inventory of all dealers that offer the car before they are sold during the month measured. The industry’s average is about 50 days when spread across a large car company’s national inventory at its dealers. Some unpopular vehicles can remain for as many as 120 days on the lot. Cars and light trucks, which are virtually unavailable at most dealers, only stay 15 days or fewer on the lot. A figure this low means that only a few dealers nationwide have supply of these cars or light trucks.
24/7 Wall St. used data from Edmunds to determine which cars were hardest for buyers to find in November. The list includes two BMW models, one Mercedes, one Audi and one Lexus — all expensive cars. It also includes two models from low-price manufacturer Hyundai and one from sister company Kia. In addition to those, the list has one Toyota (NYSE: TM) and one Subaru on it. Each of these had a relatively low sticker price.
These are the cars so hot they are out of stock.
10. Hyundai Elantra Days to Turn: 12 Price: $16,445 Configuration: 4 Cyl, 4 Door
The Elantra is one of a number of compact cars offered by most of the manufacturers. Its four-cylinder configuration allows it to get 40 mpg highway. The primary import vehicles the Elantra competes with are the Toyota Corolla, the Honda Civic and the Nissan Maxima. Hyundai has gained more market share in the U.S. over that past three years than any other manufacturer. The South Korean company blends low sticker prices with products that do well in most industry tests for reliability.
9. Audi Q5 Days to Turn: 13 Price: $35,600 Configuration: Turbo 4 Cyl, 5 Door
The Q5 is among the crossover vehicles offered by the German luxury manufacturers. A turbo four-cylinder engine powers the base model. The turbo boosts performance to 211 bhp, a level normally found in a V-6. Features beyond the base model can drive the sticker price above $50,000. Audi has done particularly well in the U.S. in the past year, taking market share from BMW, Mercedes and most other imports. Audi’s global sales have also surged, and were up 18% to 1.1 million in the first 10 months of this year.
8. Kia Soul Days to Turn: 13 Price: $13,900 Configuration: 4 Cyl — 16 Valve, 5 Door
The Kia Soul is one of the lowest priced five-door crossovers sold in the U.S. Its single largest competitor is the Nissan Cube. Highway MPG is estimated at 35. The Soul is one of the inexpensive cars and light trucks that has helped Kia, a division of Hyundai, to grow rapidly in the U.S. The manufacturer sold more than 442,000 vehicles in the U.S. through November compared to 325,000 in the same period last year — an increase of 36%.
7. Toyota Highlander Hybrid Days to Turn: 14 Price: $38,140 Configuration: 6-Cyl Hybrid, AWD 5-Door
Toyota has had trouble keeping many of its very popular vehicles in stock because of sharp drops in production caused by the Japan earthquake and tsunami in March. Other Toyotas in short supply include the base Highlander, the RAV 4 SUV and the mid-sized four-door Camry. Overall demand for hybrids in the U.S. has risen with the price of gasoline, which soared to nearly $4 per gallon of regular earlier this year. Every large manufacturer with significant sales in the U.S. offers sedan and crossover and SUV hybrids. The Highlander’s hybrid has a bhp output higher than most engines driven by gasoline alone, at 280.
6. Hyundai Accent Days to Turn: 15 Price: $14,195 Configuration: 4 Cyl, 4 Door
The Accent is Hyundai’s low-priced four-door. Along with other Hyundai models and those of sister company Kia, it has become part of highly popular lines of cars and light trucks from the South Korean manufacturer that had almost no presence in the U.S. five years ago. The Accent competes with the Honda FIT and Ford Fiesta. It gets 40 mpg on the highway. The car is an entry-level vehicle for shoppers who want an extremely low-price, high gas mileage car with a reasonable reputation for quality.
5. Mercedes M-Class Days to Turn: 15 Price: $48,990 Configuration: 6-Cyl, 5 Door-SUV
The M-Class is Mercedes’s standard SUV. “Fully loaded” with options, the vehicles sells for more than $70,000. Competition for the M-Class includes the BWW X5, the high-end Audi Q5 and the luxury SUVs made by Lexus, Cadillac and Lincoln. 2011 has been an extraordinary year for Mercedes in the U.S. Total sales through November were higher by 46% compared to 2010. The entire luxury end of the car and light truck market in the U.S. has held up well, despite a spotty economy.
4. Subaru Outback Days to Turn: 15 Price: $23,295 Configuration: 4-Cyl Boxer Engine, 5-Door
The Outback is the crossover model from the only Japanese manufacturer that has four-wheel drive transmissions across its entire fleet of cars and light trucks. The Outback gets 27 mpg highway despite its relatively powerful 170 bhp engine. The vehicle has gotten extremely good reviews and is one of the cars recommended by Consumer Reports. The Outback is designed for, among other things, the driver who wants high gas mileage.
3. BMW X3 Days to Turn: 15 Price: $36,850 Configuration: 6-Cyl, 5-Door SUV
The X3 is BMW’s entry-level vehicle in the sports utility category, although the price of the model with the most options is as high as $50,000. The base 240 bhp engine gets only 25 mpg highway, so the target demographic for the SUV is not those who are gas-price conscious. The X3 competes with the Audi Q5, which is also on this list, as well as the Mercedes GLK 350. BMW’s sales through November were up by only 7% compared to last year, but sales of its light trucks, which include the X3, are higher by 91% for the same period.
2. Lexus RX 450h Days to Turn: 16 Price: $45,235 Configuration: 6-Cyl Hybrid, 5-Door SUV
Lexus, owned by Toyota, has been troubled by supply constraints because of the March Japanese earthquake. It is also in the popular hybrid sector of the market. The SUV has a powerful 295 bhp engine, but the hybrid power plant allows the vehicle to get 30 mpg when driven on the highway. When loaded with all accessories, the RX450h moves toward the mid-tier of the luxury market with a sticker price of well above $55,000. The demand for this Lexus is a bright sport for Toyota because the manufacturer’s sales in the U.S. were up only 6.7% through the first 11 months of this year compared to last year.
1. BMW X6 Days to Turn: 16 Price: $59,300 Configuration: 8-Cyl, 5-Door Crossover
The BMW X6 is the company’s crossover. With a complete array of features its price can rise above $75,000. The vehicle competes with the Porsche Cayenne, Infiniti FX50 and Mercedes R-Class. The X6 gets 23 MPG highway. The popularity of the X6, like that of the Audi Q5, is an example of how the high-end of the crossover market has not been damaged by the recession. The shortage of X6 and X-3 BMWs shows that the German car company has extremely profitable models at each end of the light truck/SUV market, based on price.
Douglas A. McIntyre