Clunker sales cause inventories to plunge

Clunker

Preliminary inventory reports for Aug. 1 indicate unsold vehicles fell below 2 million units — the lowest figure since at least 1992, when the Automotive News Data Center began combining inventory figures for cars and light trucks.

The July 1 figure, 2.2 million units, already was the lowest monthly inventory mark since 1992. Because the annualized selling rate rose in July, inventories on a days-supply basis fell sharply. Chrysler Group shed 58,600 units last month, or 30 percent, and its days supply fell to 40, from 71 on July 1.

Ford Motor Co.’s inventory slid to 48 days, from 57 on July 1. General Motors was at 64 days, down from 82; Toyota Motor Sales U.S.A. was at 29, from 47; and Hyundai-Kia was at 43 days, down from 49.

Data are not yet available for American Honda Motor and Nissan North America. But, combined, GM, Toyota, Ford, Chrysler and Hyundai-Kia cut inventories by 277,200 units in the past month.

Dealers are scrambling to replace models in short supply.

“Inventories are the lowest I have ever seen,” said Gordon Stewart, president of Stewart Management Group in Harper Woods, Mich. “We are scrambling to buy cars from other dealers. We are parking late-model used cars in spaces where new vehicles are normally displaced just so we look like we are still in business.”

Stewart said he got a “trickle” of vehicles from GM this week. He said it will take several months for dealers to build up a 60-day inventory.

Roger Mercer of Mercer Nissan Mazda in Lufkin, Texas, says in January he made a decision to reduce his inventory by 30 percent.

As a result, he is now short of Nissan Altimas, Sentras and Rogues and Mazda 3 and Tribute vehicles.

“You try to do a trade but most dealers are short on the same vehicles,” Mercer says. “But we’re resilient. It’ll all work out.”

Jason Metz, finance director of Burnworth-Zollars, a small dealership in Ligonier, Ind., that sells Ford, Mercury, Chevrolet and Pontiac, says most of the 21 new vehicles he sold under cash-for-clunkers were Fords, and he sold his last Ford Focus this morning.

He says he has two Fusions left and a reasonable number of Chevrolets.

If someone comes into the store looking for a Focus, the store will try to sell them a Fusion or a GM car, he says.

But he isn’t complaining. Cash for clunkers has “moved a lot of cars for us,” he says. “We’re lucky to do 21 cars in two months.”