Credit Suisse: Chrysler 80% Truck Overstock
• 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
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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.