Vehicle Movement Stalling as Inventories Ramp Up
It’s no secret that automotive prices are at a high level and have been elevated for more than three years. In Cloud Theory’s 2024 Year-in-Review and 2025 Outlook Report, we cited various reasons for this dynamic—general inflation, the discontinuation of lower-priced models in OEM portfolios, and a greater emphasis on higher-end trims, especially when parts supplies were short.
There has been a bit of price relief for consumers in the latest periods—average marketed prices are down by almost $1,300 since the 2024 peak that was hit in June—but they are still well above historical levels.
Source: Cloud Theory 2025
It does appear that OEMs are beginning to focus attention on more affordable trims, which is contributing to the recent drop below $50K. Consumers, however, are not following through in purchasing this inventory.
it In the last 90 days, the supply of trims priced under $35K increased by 21% compared to the year prior--a larger increase than was seen for vehicles in the $35-$60K range (though a smaller rise than for $60K+ vehicles). Vehicle movement for the lower-priced offerings, on the other hand, grew by only 3%--well below the rate for mid-range and higher-end selections.
The attitudes and behaviors of younger and middle-to-lower income consumers—who are prime targets for purchasing vehicles in this price range—are revealing cracks in the lower end of the automotive buying landscape. A number of factors are at play, with general affordability and financial viability, avoidance of the financial burden from loans, rising insurance rates, and spending priorities on goods and services such as child care, housing costs, and other major expenses all contributing to marketplace pressure.
Make/model/trim examples show how widespread this dynamic is, as virtually all manufacturers (with the notable exception of Toyota, which has seen its overall inventory position erode over the past year) are affected:
In all, 59 of the 89 (66%) <$35K make/model/trims with 2,500 or more vehicles in inventory saw a larger rise in inventory than movement in the past 90 days compared to last year.
So what does this mean for OEMs? With this lower-priced inventory stacking up, communicating vehicle benefits in addition to transparently and prominently revealing available incentives becomes paramount. Even more importantly, identifying and prioritizing targeted buyers and exposing them to relevant inventory—and being able to do so at the trim and even VIN level—will maximize the likelihood of moving these vehicles quickly and efficiently.
In today’s shopping environment, making smart data-driven marketing support decisions can overcome these challenges and give you a leg up. Find out how Cloud Theory can help you do just that with our Horizon insights platform and activation programs.