Report: New-Car Inventories Remain Balanced in Europe

Dealer supplies of unsold new cars in Europe are at near ideal levels, according to market analysts LMC Automotive.

The firm considers a 61-day supply normal for the region. Arthur Maher, director of research, says inventories crept up to 63 days in the second quarter but are likely to shrink to 57 days in July-September. “Control,” he says, “remains the order of the day.”

Maher forecasts that European car production will expand about 3% this year. He says two-thirds of the total will be absorbed by the local market. The balance will be exported, although growth in that segment is less than 1%.

Europe’s exports as a percentage of total domestic production have slipped to 13.6% from 15.1% in 2014, according to LMC’s analysis. But that reduction due to rising domestic sales. Europe’s annual export volume has plateaued at about 3 million units per year since 2014.

Maher anticipates industrywide production will rise less than 2% next year, a pace he describes as the “new norm.”