Car Glut Debilitates Chinese Car Industry. Now Wait Until You Get To Detroit

Bertel Schmitt
by Bertel Schmitt
car glut debilitates chinese car industry now wait until you get to detroit

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.

In Detroit.

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?

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3 of 43 comments
  • Dave M. Dave M. on May 20, 2012

    That's why the Japanese approach to having limited trim lines makes much more business sense, although I can understand how the truck department needs to work differently especially for the work crowd. If they could approach 25 mpg on the highway, I wouldn't mind a Lariat or Sierra for mid-20's, even if they're 2011s. I drive my cars forever (and 200k+ miles), so I could care less about depreciation....

  • Type57SC Type57SC on May 21, 2012

    As many have said before, you can't lump a GM total inventory up against Honda, who don't make PUs and vehicles for upfitters. You need a lot more F150s than Accords that have a couple colors and options vs the F150. Looking just at cars, not LT, Ward's sees Detroit improving last month. Queue the Bloomberg headline!! "Detroit improves inventory, Asians in touble due to skyrocketing inventory!!" April March April 2012 2012 2011 CHRYSLER TOTAL 37 46 46 FORD TOTAL 53 48 40 GM TOTAL 65 69 48 BIG THREE TOTAL 54 56 45 ASIA/PAC TOTAL 40 37 39 EUROPE TOTAL 44 49 50 TOTAL CARS 45 45 42

    • Mike978 Mike978 on May 21, 2012

      Thanks for the information. It is good to see cars separated from trucks so it is a more apple to apple comparison. However I don`t see how GM is improving (as per headline) if they went from 48 days in April 2011 to 65 in April 2013.

  • 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.
  • ToolGuy Is it a genuine Top Hand? Oh, I forgot, I don't care. 🙂