Two days ago, Bloomberg brought harrowing news:
“Chinese dealers are struggling with the rising number of unsold cars that’s threatening to deepen price cuts. Dealerships for Honda Motor Co., Chery Automobile Co., BYD Co. and Geely carried more than 45 days of inventory as of the end of April, exceeding the threshold that foreshadows debilitating price cuts.”
Automotive News made the matter the opener of its Friday video newscast. Apparently, the sky is soon to fall in China. The situation is even more dramatic elsewhere.
A month ago, we wrote about inventory levels at U.S. dealers. Here, 2 months of supply are considered as normal, and the average stood at 54 days when we wrote the story. The Detroit 3 however jointly had an average of 70 days’ of supply sitting on the lots. General Motors had nearly three months of supply.
If 45 days of supply foreshadow debilitating price cuts in China, what does 86 days of GM supply foreshadow in Detroit?