Another lie by the Obama administration’s “recovery” has been exposed. The upturn in our GDP based on auto sales has been revealed to be nothing more than forcing dealerships to increase their inventory through channel stuffing. Just like the government’s false labor statistics, cars and trucks sitting on a dealer’s lot will not get us out of this depression. Nor will an artificial stock market.
David DeGerolamo
Auto Makers’ Channel Stuffing Highest Since 2005
While the abundance of commercials for cars across all media this time of year is nothing new, the manufacturers (and even more so the dealers) are likely getting more desperate. As Bloomberg reports,inventory climbed to almost 3.4 million cars and light trucks entering November – at 76 days of supply, that was the highest for the month since 2005. This should come as no surprise as we previously noted GM’s post-crisis highs in channel stuffing as hope remains high that the recent slowdown in sales does not continue. The question, of course, is, “will manufacturers be responsible and curb production to keep inventory in check, or are some going to resort to old, bad habits and churn it out and then throw incentives on them.” We suspect we know the margin-crushing answer.
the levels harken back to early in last decade when steep price discounting was used to prop volumes,…
Excluding 2008 when the industry was heading into recession, LV inventory totaled 3.397 million at the end of October, highest for the month since 3.803 million in 2004. October’s 76-day supply, was the highest for the month since 77 in 2005.
By comparison, sales in 2013 mostly have run at highs dating to 2007, suggesting inventory is getting ahead of the curve.
GM just saw the biggest two month jump in inventory in the restructured company’s history.
