MY 2025 Order Updates

Below we outline some of the major factors influencing vehicle supply and availability:

• Industry experts predict the UAW strike to potentially increase vehicles prices by $700 to $900 per vehicle.  ​
• Non-UAW OEMs have all increased the wages to their employees to prevent the UAW from gaining a foothold at those plants. ​
• There are geo-political flare ups with terrorist activity impacting Suez Canal resulting in ships being diverted around Africa causing delays and higher costs due to fuel. ​
• In the Panama Canal, traffic is restricted to lower water levels and could impact Asia bound traffic to East coast. ​
• Expect to have very few vehicles/models to have production constraints for MY 2025.  Work vans, hybrids and medium duty vehicles will continue be in tight supply.
• Light duty pickups, SUVs, Sedans and EVs will be available from most OEMs without supply chain constraints.
• All OEMs are open to accepting new customers.
• Dealership inventory has increased to 71 days (even after the impact of UAW strike).
• We expect to see some OEM’s increase incentives in MY2025.

Used Car Market

The wholesale market continues the rollercoaster ride, but last week, the declines did show signs of slowing with all vehicle segments depreciating less than 2% for the first time since the last week of October. The market is expected to slightly continue declining in 2024 while we currently still see the market average price above the average index from 2019.

Early View of MY 2025

Other than some popular fleet vehicles (Vans, Pickups and Hybrid), we expect most OEMs to have less allocation constraints meaning fleet customers will be able to order what they need.

Additionally, availability is dependent upon the vehicle type needed. Heavy demand for pickups, work vans and hybrid vehicles, which are in limited supply due to battery constraints, will almost certainly cause OEMs to cut off orders early in some cases and extend order banks in other cases. This will most likely continue through MY2024.

We are proactive and get you the information that you need when it comes to factory ordering. Navigating the supply chain is a top priority in supporting our clients. We continue to work on your behalf through engagement with OEMs regarding allocation and production, weekly delayed order reviews, weekly executive leadership meetings, increased staffing to acquire out of stocks, and by rapidly updating our systems with order status. If there is one very vital piece of advice that we can offer, it is to order early—get your orders into the pipeline. Reach out to your OEM rep and don’t take your allocations for granted. Being proactive will increase your success. Below, we have listed out what we deem to be the essential steps to prepare for MY2024 factory ordering:

1. Don’t take your OEM allocation for granted – preference will be given to existing customers.
2. Finalize your OEM incentive programs now. 
3. Collaborate with your Wheels rep to get your OEM info (especially Ford). 
4. When specs are available, work with your Wheels rep to prepare and place orders.
5. ORDER EARLY – order cutoffs will remain volatile. 

Be Aware

Vehicles with upfit could experience delays as upfit lead times have increased and production dates and lead times will continue to evolve throughout the year. For out-of-stock orders, expect high prices, low inventory and longer timeframes. To increase your OOS options, decide on “must have” vs. “can’t have” equipment and colors—don’t expect to purchase vehicles that are a perfect match. Once a vehicle is located for you, approve it quickly. A delay will lose the vehicle.

Unfortunately, vehicle delivery delays continue. This is due to industry logistics that are severely constrained, making it difficult for any OEM or supplier to provide concrete delivery dates.

Here are some of our observations we would like to share with you based on our experience, research and expertise:

• The long-term supply chain impact from Covid persists.
• Product is expected to be up 5-10% throughout the industry; expect allocation to continue from most OEMs.
• Retail sales are softening which could lead to more fleet allocation.
• There are higher prices and lower incentives across OEMs, and we expect a year over year price increase between 3-10%.
• OEMs are starting to increase supply to their rental partners.
• Dealer inventory is increasing for most OEMs and dealers continue to command MSRP or close to MSRP prices.
• Used car prices are starting to dip slightly.
• Nationwide labor shortages especially in logistical areas continue to impact delivery of vehicles to drivers. Examples of congestion areas are KC (upfit) and Mexico railcar.
• Ford not expecting to build as many EVs as originally forecast.

Out of Stock (OOS) Purchases

Dealer inventory is improving but still at half of 2019 levels. Expect the longer timeframes for sourcing OOS units to continue. Vehicles with higher equipment specs have the most availability. Since dealers may be unwilling to sell their limited inventory to fleet customers, their pricing will often be over MSRP.

Persistent Delivery Delays

And as we’ve detailed in previous articles, logistical problems such as the tight labor market and railcar shortages continue to impact delivery of all vehicle types to drivers. The long-term impact from the pandemic is still being felt in our industry—the volume of delivered vehicles in dealers’ lots is steadily rising.