Just weeks after Ford idled four plants "due to slowing sales", GM and Fiat Chrysler announced today that they will idle seven plants across Canada and US as they work to reduce near-record high inventories amid weakening sales.
With an inventories-to-sales ratio above historical peaks (only beaten by huge spike in 2008 when sales stopped), the pain for automakers has only just begun...
For example, GM's inventory of vehicles on dealer lots at the end of November stood at 874,162, up 26.5% from the same time a year ago. And so, as AP reports,
General Motors will temporarily close five factories next month as it tries to reduce a growing inventory of cars on dealer lots.
The factories will close anywhere from one to three weeks due to the ongoing U.S. market shift toward trucks and SUVs, spokeswoman Dayna Hart said Monday. Just over 10,000 workers will be idled.
The company's Detroit-Hamtramck factory and Fairfax Assembly plant in Kansas City, Kansas, each will be shut down for three weeks, while a plant in Lansing, Michigan, will be down for two weeks. Factories in Lordstown, Ohio, and Bowling Green, Kentucky, each will be idled for one week.
The factories make most cars in the General Motors lineup including the Chevrolet Cruze, Camaro, Corvette, Malibu, Volt and Impala; the Cadillac CT6, CTS and ATS; and the Buick Lacrosse.
At the current sales pace, GM dealers have enough Malibus to last for 84 days and enough Camaros to last for 177 days, according to Ward's Automotive.
Normally automakers like to have a 60-day supply on lots.
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If they were not so greedy in their pricing then they would move more. They could drop $10,000 on 95% of their pricing and still make a healthy profit from the top down to the smallest dealer.
ReplyDeleteI had been in the market for a new vehicle for the past 6 months. I was told on several occasions, "If you're interested in the ?????? we can knock off $10,000 to start the discussions." That absolutely inflamed me....if a dealer can discount the vehicle THAT much, then the vehicle is priced too high to start with. I did finally buy a vehicle, BUT not that particular model. I bought what I wanted, and it was priced too high, at least according to the discount. Disgusting way to run a business.
ReplyDelete1:01-The new car graveyard is an eye opener.If car companies did as you said with the $10,000 that graveyard would barely exist.
ReplyDeleteAmericans love Korean cars: Kia and Hyndai
ReplyDeleteI see huge numbers of these 2 brands on the roads locally.
It is unbelievable how much market share they have.
For Price? I don't know, but Americans sure do love Korean cars.
Just wait until the Fed raises rates and sub prime car loans go away. We've only ever bought 2 new vehicles and paid cash. Still buy newish (2-4yr old) vehicles for cash. Dad said never finance a depreciating item.
ReplyDeleteI thought the economy was roaring. At least that is what I have been hearing from Obama. I would think people have plenty of money to buy cars.
ReplyDeleteThey are buying, just not GM/US made junk.
ReplyDeleteMaybe GM should bring out five or six more models that compete with their other models. Stupid greedy arrogant management at GM!
ReplyDeleteSo GM filed for bankruptcy, the government bailed them out, they were forgiven of billions in debts and obligations, and they are still in trouble.
ReplyDeleteWho'd a thunk it?
Maybe GM should just go away!
They close plants in ohio/Indiana every year at the same time. Workers receive 75% of their pay, don't have to take leave, etc. ALL negotiated by the unions. Come on folks, most of us don't live/work in the industry - we see a story like this and everyone jumps to conclusions.
ReplyDeleteWag the Dog/MSM will be changing shortly.
TRUMP!
Shuuussh be very quiet. I can still hear that sucking sound going south
ReplyDeleteAll is getting Much better in 30 days ...don't worry !!!
ReplyDeleteJust bought a new Honda Accord and traded in my 05 Pilot with 200,000 miles on it. Never owned a Chevy or a Ford that held up or retained their pricing like a Honda or Toyota. Until they can prove they have improved their quality and pricing, I will not be buying GM (government motors) or a Ford (fix or repair daily) again. Chrysler's suck as well unless you are buying a new Dodge Truck or Ford Truck. Trucks are all they are good for.
ReplyDeleteMost Japanese cars and trucks are made here in America. For the same price, I will buy quality. American cars also don't retain their value at all.