Credit Suisse: Chrysler 80% Truck Overstock

Robert Farago
by Robert Farago

• At the end of December, we find Big 3 dealer stocks to be about 31% above normal, which is about where they ended November. The truck mix headed higher again in December, and combined with weak industry sales to leave cars about 75% overstocked. Light trucks were about 12% overstocked.

• We estimate Chrysler to be the most overstocked of the Big 3, with dealer stocks about 45% above normal. Trucks are about 80% overstocked, while cars are about 37% overstocked.

• Ford ended the month overstocked by about 22%, with passenger cars a sharp 83% above normal, and trucks about 2% below normal.

• GM was about 29% overstocked at the end of December, with cars 70% overstocked, and light trucks about 9% overstocked.

• A look at days’ supply of foreign brand vehicles also shows a severe overstocked situation. For example, Honda dealers had 96 days of car supply in December, up from 50 days in the year-ago month; Toyota had 94 days of car supply, up from 42 days a year ago; BMW had 57 days of car supply, up from 22 days in December 2007.

• While we typically don’t like to look at days’ supply numbers with only one month of sales in the denominator, these numbers are indicative of a risky inventory situation for the foreign brands, especially if sales remain in the 10 – 11 million range in coming months.

• The domestic brand automakers are attacking the overstocked situation head-on in the first quarter with sharply lower production. GM’s current plan calls for output to be down 53% versus 1Q08; Ford’s plan call for Q1 production down 42% versus like-2008.

• Based on these plans, we see GM inventory ending the first quarter about 19% understocked, and we see Ford inventory ending the first quarter about even with the normal level. Our analysis assumes a light vehicle SAAR of 11.5 million, truck mix of 52%, and market share estimates as shown in the report.

• Note that the truck mix assumption we use in this report (52%) for forecasting purposes is higher than the 50.5% we had been

Join the conversation
2 of 6 comments
  • PeteMoran PeteMoran on Jan 10, 2009

    Thanks Pch101. What a weird way to do it. I suppose it's the automotive version of March 2009 magazines being on the stands now. So to correctly interpret these numbers, one needs to know the mix of 2008 and 2009 vehicles in that stockpile. So if Toyota or Honda have nothing but 2009 models "overstocked" then that's not such a problem as (what everyone is wondering) Chrysler having a majority of 2008 models. Huge incentives on 2008 models from both GM and Chrysler suggests i) they have large numbers of them, and ii) they were trying to generate free cash quickly.

  • Pch101 Pch101 on Jan 11, 2009
    So to correctly interpret these numbers, one needs to know the mix of 2008 and 2009 vehicles in that stockpile. So if Toyota or Honda have nothing but 2009 models “overstocked” then that’s not such a problem as (what everyone is wondering) Chrysler having a majority of 2008 models. Undoubtedly, the Detroit figures are much worse. Toyota and Honda are now carrying days of inventory that are similar to what Detroit usually carries during the best of times. The Detroit inventory figures have a higher baseline to begin with. Translate their figures into days, then we're talking about the domestic dealers carrying 4-6 months worth of inventory.

  • FreedMike I don't know why this dash shocks anyone - the whole "touchscreen uber alles" thing is pure Tesla.
  • ToolGuy CXXVIII comments?!?
  • ToolGuy I did truck things with my truck this past week, twenty-odd miles from home (farther than usual). Recall that the interior bed space of my (modified) truck is 98" x 74". On the ride home yesterday the bed carried a 20 foot extension ladder (10 feet long, flagged 14 inches past the rear bumper), two other ladders, a smallish air compressor, a largish shop vac, three large bins, some materials, some scrap, and a slew of tool cases/bags. It was pretty full, is what I'm saying.The range of the Cybertruck would have been just fine. Nothing I carried had any substantial weight to it, in truck terms. The frunk would have been extremely useful (lock the tool cases there, out of the way of the Bed Stuff, away from prying eyes and grasping fingers -- you say I can charge my cordless tools there? bonus). Stainless steel plus no paint is a plus.Apparently the Cybertruck bed will be 78" long (but over 96" with the tailgate folded down) and 60-65" wide. And then Tesla promises "100 cubic feet of exterior, lockable storage — including the under-bed, frunk and sail pillars." Underbed storage requires the bed to be clear of other stuff, but bottom line everything would have fit, especially when we consider the second row of seats (tools and some materials out of the weather).Some days I was hauling mostly air on one leg of the trip. There were several store runs involved, some for 8-foot stock. One day I bummed a ride in a Roush Mustang. Three separate times other drivers tried to run into my truck (stainless steel panels, yes please). The fuel savings would be large enough for me to notice and to care.TL;DR: This truck would work for me, as a truck. Sample size = 1.
  • Art Vandelay Dodge should bring this back. They could sell it as the classic classic classic model
  • Surferjoe Still have a 2013 RDX, naturally aspirated V6, just can't get behind a 4 banger turbo.Also gloriously absent, ESS, lane departure warnings, etc.