Car Shortage? What Car Shortage?

Bertel Schmitt
by Bertel Schmitt
car shortage what car shortage

With all the news about earthquakes and tsunamis, you would think that the lots of your favorite ricer retailer are bare. They aren’t. But some dealers hang on to what they have got and sell it at healthy mark-ups, assuming that the pipeline will run dry. Both Honda and Nissan are unhappy with this perception and tell their dealers to move the metal. “Honda told its U.S. dealers Friday that July vehicle deliveries would increase by 11% from June levels and accelerate in August as the auto maker ramps up production after the March 11 earthquake in Japan,” says The Nikkei [sub].

Honda’s Executive Vice President John Mendel told his dealers that sales “run at a relatively soft pace” despite what Honda considers decent inventory levels. Mendel thinks dealers are holding back: “Many of you have indicated that it is due in large part to concerns for inventory going forward.”

“It’s interesting to note that although our total inventory is down versus May 2010, we have more CR-Vs, Pilots and Fits in dealer inventory now than we did a year ago,” Mendel said. “With this level of inventory, coupled with competitive incentives focused on vehicles with sufficient availability, you all need to continue to push hard on the sales front.”

“Last week, Nissan asked dealers to be more aggressive and go after Toyota and Honda, which it deemed vulnerable,” The Nikkei says.

Toyota’s answer? Also a memo to dealers. U.S. sales chief Bob Carter said Toyota should have more than 300,000 vehicles available for dealers this month, or enough to last more than 6 weeks at current sales rates, Automotive News [sub] writes.

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4 of 16 comments
  • Beken Beken on May 20, 2011

    I understand the profit margins on used cars are much higher than new cars. They want your used car to flip. If they can talk you into buying a used car, they make money off of you coming and going. If they sell you a new car, they make a little less unless they can talk you into paying a marked up price.

  • Ciddyguy Ciddyguy on May 21, 2011

    My Mom has gotten these letters for her 2004 Dodge Stratus for a couple of years now - and largely from the dealer she bought it from back in 2005. She's keepin' it until she can't drive anymore and besides, it's just now paid off, and that occurred back in March. I find them a come on to get you into the dealership, and it may be that, that particular dealership isn't getting the sales they'd like due to competition from nearby dealers for new and/or used cars. And besides, you can't pay me to buy a 4 door sedan anyway, a small hatchback is my car of choice.

  • Tallnikita Tallnikita on May 21, 2011

    "CR-Vs, Pilots and Fits" hmm, maybe there is a message from consumers in there somewhere??? try to make Fit less ugly by design, perhaps?

  • Gator marco Gator marco on May 23, 2011

    I get those letters on a weekly basis - we have 4 cars, and 3 of them apparently are the most sought after vehicles in America: a 2005 Ford Taurus, a 2005 Hyundai Santa Fe, and a 2007 Pontiac Torrent. Why, I must be an absolute fool to keep them, when the dealers tell me I'm leaving money on the table by not trading in. Somehow, my daughter's 2007 Vibe, with dear old dad still on the loan, doesn't appear to garner the same attention. Maybe because the dealership that sold us the car new was part of the GM cull.