Ask the Best and Brightest: What's the REAL Auto Inventory Situation?

Robert Farago
by Robert Farago

Before the worldwide auto industry meltdown, most analysts reckoned carmakers had burdened themselves with 40 percent production over-capacity. After the new car market shrunk by 40 percent, well, you do the math. Only there’s an anomaly: inventory levels. While we’ve got a pretty good idea of how many day’s supply of vehicles are lingering in dealer lots, what about all those ’08s and ’09s stored on vast parking lots, ships, airfields, etc.? [NB: above pic is from Mother Russia] The story got lots of play at the beginning of the cartaclysm, but slipped off the radar since then. Are we to believe that the lots were slowly emptied, as manufacturers shut down their plants? Or are there still hundreds of thousands of cars out there . . . somewhere? If so, we’re still in a price-inflated market, as those cars have to be sold sometime to someone. Anyone have any anecdotal or objective evidence one way or the other?

Robert Farago
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  • Orian Orian on Jul 14, 2009

    Hyundai/Kia like to use Scioto Downs just south of Columbus as a storage lot during the "off season" when the harness racing isn't taking place. I know this year alone there was probably close to 1000 Kia's of all models sitting there. Of course come May 1st they had to be relocated as they prepared to open up for the season, but Hyundai and Kia are sitting on a lot of cars in the Central Ohio area right now.

  • Fallout11 Fallout11 on Jul 14, 2009

    The average age of a car in Cuba is 40+ years old. Americans can drive hoopties/clunkers for decades and never touch another new vehicle if they so desired and economics dictated so. 12 million vehicles per year do not need to be replaced, no more than 17 million did (i.e. previous annual sales figures). Sorry menno, you're way off on this call. As for prices, cash on the hood and similar incentives, and "what one should pay for a year old vehicle", I direct your attention to a comprehensive report by Forbes, Consumer Reports, JD Power and others that points out that many, many new vehicles, especially from the Detroit 2.8 are badly overpriced (example: Dodge Ram 1500 pickup is actually worth about $7500) despite the incentives. As for old new stock, vehicles do not store or age well without careful preparation, ask any auto museum curator for details. Cars sitting around for 18+ months waiting on someone to buy them have almost become lemons, fluids have settled, rubber/plastic components have started to degrade, UV damage to paint and synthetic parts is well underway, problems will range from simple things like rotten windshield wiper rubber to oil sludge formation and dry rotted tires. Look for birds nests, spider webs, and dead bugs inside the trunk, rusty spots, stains, condensation buildup, squeaks and squeals, split seat stitching or cracked dashes (in hot sunny climates), unlubricated journals, etc. They were designed and built to be operated regularly, not meant to sit around. 50% MSRP is probably generous. Final note- Local Chryco dealership with two giant inflatable gorillas on the roof, not set to close, has sold or otherwise "moved" 75% of what was on their lot, and they were overstuffed to the gills a few months ago with factory cramdown stock. Meanwhile, the two GM dealerships in town consolidated into one, the closed one is boarded up, the remaining one is still stuffed to the gills with unsold stock equipped with 4 foot high magnetic price stickers. My old pickup will keep right on running, thank you very much.

  • Ohsnapback Ohsnapback on Jul 14, 2009

    My car is 3 years old and 32,000 miles. For the first time, after owning maybe 10 cars in the last 25 years, and after buying or leasing a new car every 2-3 years, I have NO INTEREST in buying or leasing a car, and selling the one that I own, problem free, for a long, long time. I even have my own, private mechanic, plucked from the hundreds and hundreds of people advertising their skills for sale in Craigslist - he knows his stuff, and saves me 70% off the stealership prices for maintenance, and he's better off (makes more $$$) and I'm better off for it. Many if not all my friends feel and are acting consistently as I am. I can honestly see hanging on to my current car for another 5-8 years, easy. This is the first time I've engaged in this behavior, and the first time I've seen my circle of friends and family mostly following along. A sea change has taken place. The best selling cars in the U.S. right now are used cars priced $4,600 or less.

  • Ravenchris Ravenchris on Jul 14, 2009

    fallout11 ohsnapback I'm with you. Recently moved very close to work, keep the cars in a two car garage. That and a proactive maintenance regimen will allow us to say 'fuck you' to Big Auto for ten years.