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Easy fix...just make the dealer storage lots and show rooms bigger!
I wonder what floorplan concessions GM has already given the dealers. I worked for GM, and there were two ways to get dealers to hold more inventory: incentives and extortion. You can only extort the dealers if you have cars that are hot. How it works is your regional rep will say "take an extra 50 cars that you don't want and I will give you an extra 10 of the hot model." If you don't want the extra cars, you get NO inventory of the hot model. Most dealers finance their inventory (floorplan) and manufacturers give dealers typically 90 days of free float until the interest clock starts ticking. Sometime they will give a special deal to take more inventory. My guess is that is how they are getting dealers to choke on this extra inventory. The OEMs use this tactic to smooth out cyclical and seasonal production/sales.
I'm willing to bet it is more than 90 days free flooring now. I'm at a commercial truck dealership and some mfg. are offering 6 months +
around these parts they have let some of the dealers "rise from the dead" so they have a place to park more vehicles.
Nobody is buying them, I pass a couple of large dealers and they have them parked out in the cornfields. I expect them to be dug up some 100 years from now and wonder at why we turned our crop land into car lots!
Oh, all knowing obammy , you are my guide my light my evertyhing!
When they dig up those cars in the future they will be puzzled--by what miracle did these Americans manage to grow a crop of cars in a field? And why did they not harvest them?
not so much as even given the decline of education in vast parts of the country there will still be a few left that will understand that any crop that wasn't harvested was due to no demand for that crop.
New Kia dealer in SW Florida near Fort Myers has the empty lots around it bursting at the seems with inventory. I never see any customers in there but they keep stuffing the the lot with more vehicles. The other day I saw am ambulance at the place. Not sure what that was about. We have 25% unemployment here. Does anyone have total inventories of all manufacturers?
GM said that its incentives totaled 13% of the price of the vehicle versus 10.6% for the industry. Most of the incentives are on trucks and SUVs. During 4Q, GM grew car production by 5% but truck/SUV production by over 20%. Not only is the inventory too high but the inventory is the wrong type of inventory in a $4 a gallon gasoline world. GM says they will back off incentives in March. Good luck. Meanwhile, Ford is saying that inventory levels for many trucks and SUVs are down to 2 weeks. And which auto maker is better managed?
GM's bragging that U.S. sales increased by 46% in February. Great... What they aren't saying is that analysts are freaked about the steep discounts and incentives -- driving sales at the expense of profitability. This is what got them in the shitter in the first place.
GM’s U.S. sales chief Don Johnson called analysts essentially nonsense, saying that “there is clearly a lot more going on here than a mere incentive move of a few hundred dollars.” Sure, if GM's incentives and discounts were a few hundred dollars... They're not. Truecar.com says their incentive spend in February was more like $3683 per vehicle, 36% more than the industry average. What does this show? They don't have pricing power.
“If you have to have a prayer session before raising prices by ten percent, then you’ve got a terrible business.” (Warren Buffett) So, what does it mean if you’re slashing prices?
Facts are inconvenient things: Consumer Reports is trashing the Volt, GM has underperformed S&P by 15% since January, and, Oh, yes, GM closed below its IPO price at 4 pm today as TD predicted... Last at $32.91
"You can't fight City Hall."
I only buy Chinese.
Phil LeBeau is having a nervous breakdown. First, Consumer Reports pans the Volt. Now this.
Seek out CNBC's Phil "Shop Steward" LeBeau for comment/clarification. There must be a UAW side to this story.
These GM-reports always make me smile and sometimes even laugh out loud. Thanks Tyler!
'BTFD in GM' - CNBC
Does anyone have the sales data charted with the inventory data? Looks like they are selling about half of their inventory?
Excellent reply... the narrative and the chart seem to imply that the dealers are running out of inventory and are having to purchases larger amounts to insure they get the inventory they need. Any salesperson will tell you- you send the inventory first to the dealers that sell the most cars.
Which brings use to the relevant point. I would like to see the stratification of the population of dealers' ending inventory before I believe that the numbers put forth in this narrative are relevant.
All I could find. Third link down, Jan 2011
How are the dealers running out of inventory when inventory has increased every month?
um, financing half maybe and half of that is getting repo'ed.
If you're looking to buy, it would be a good time to go in. Just let them know you're hip to the fact that their sitting on way too much inventory.
if you are looking to buy, then just shoot yourself.
Some things are more important than a "good" deal!
The best way to buy a car is get a broker and go to dealer only auctions. They don't trade lemons amongst each other. Avoid any auction open to the public. The broker will charge you generally $200-$500 over the cost to buy it at true dealer wholesale. They'll have an advance list and if something looks good you can go to the auction and inspect the car before hand and be there while your broker bids on the car you want. It is unreal the deals you can get. Many types of recent cars w/ fairly low mileage are auctioned such as 2-3yr old off lease stuff.
I've bought several cars/trucks at the auction, thanks to a family member in the car biz. We both used to share the flooring and flip them at retail. Really had great success with the rental company auctions, usually 22k on the odometer and well maintained. When the HELOC scam was working we couldn't buy vehicles fast enough and didn't care about the other bidders. The good old days.
yep, why try to negotiate at a stealership when you can buy for the same price they do at auction.
i've owned some v. good GM products over the years. good value, comfort, and dependability in all 3 of them, 2 chevy's and a buick. some of GM's gas-model cars might be worth looking into, if you can get a decent price.
vote for the UAW and buy American.
I know what will happen soon:
Ben will release CLUNKER 2.... get $15,000 for every junk car you trade in...
The new mazda 3's 4-door 2011 base model retail for $15,800. It's a decent looking vehicle I will say. GM and Ford cannot compete with that car. Cheap foreign labor verus unionized american labor...
Dont reward bad behavior, buy a Ford, Nissan, Honda, Hyundai, Kia, Subaru. plenty of choices out there. Plus you wont look like an Obama loving Dick (pun intended) driving a GM around
any particular reason for omitting toyota?
yeah what about Mitsubishi
How about Huffy? It will be more economical at $5/gallon gas.
my budget is for 50 a gallon, after that Huffy time
As a German I naturally vote for Mercedes, BMW, Porsche, Volkswagen... - lol - but they don't care anymore about Germans driving German cars, at the moment, they only care about rich Asian customers. And Mercedes isn't what it used to be. What a shame. They will soon join the club of losers at the rate we are selling our know-how to China like our beloved American paradigm...you know what the people in Austria and Switzerland call Germany? "Lil USA"! Because our elite wants to be like the American elite.
Government Motors is running it's company like the the government is run. They are doing Obamonster's bidding....hire people and produce things even if you can't afford to and even if no one is buying what you are making. Counterfiet Economy?
And GM is doing really well in india. Er, that is SAIC (Shangai company) and it's minority share holder GM, are doing very well here. With unusually crappy cars.
It's all one big circle-jerk.
The wheels are about ready to come off the automobile industry in it's current form.
Petrol, it was good to have met you.
Buy now or else a gubbermint motors car will cost more later and with a higher interest rate too. lolololol
On tht note, Phil "a GM in every pot" LeBeau is on again.
pump, pump, pump!
2011 Chevy Volt = $48,000
1990 Honda Accord = $2,000
$46,000 in gasoline @ $4.60 / gallon = 10,000 gallons, multiplied by 20 miles per gallon, you get 200,000 miles in the used Honda before even approaching the cost of the Volt.
They would have to pay ME 248,000 before I would touch one of those abortions.
Why ask for trouble, that thing is a joke.
Not to mention the cost of replacing the battery of batteries in less than 3 years thereby negating all of those cost savins on petrol.
Then there is the never mentioned fact that once you get wherever it is that you are going, you have to find an electrical outlet to plug your car into to refuel it.
There's that dirty, dirty coal entering the picture once again.
So all of those hypocritical greenies whom buy into this green car hype can suck on my spent fuel rod.
Yeah - but you can't impress the Starbucks crowd with your old Accord. Why not show up in a nice Govt-Imelt-Taxpayer funded award winning Volt? For me if I was really concerned about saving $ I'd get a Honda Fit.
I have a 1993 Accord with 225,000 mostly trouble free miles - the ignitor went out once on teh road. I am going to give it to my kids... They will get years of use out of it. I drive teh piss outta that car.
my brother-in-law just inherited a 1998 ACURA (smaller basic model) when his mother passed away last year. & this car only had 20,000 miles on it ! (with new tires !) .......... He doesn't like it & wants to trade it in on a new VOLVO. I am begging & pleading with him to keep his free ACURA !!
wow ! .... all i can say is wow ! that was an amazing comment .
Anyone notice the ridculous lease terms on the new Volt? $350/month... I guess these cars don't really depreciate in value. Bailout money=Chevy Volt.If GM's around in 3 years I'd love to see the writedown on the residual values as they come off lease.
Get on your knees taxpayer!
"The terms of the lease were spelled out in the Summer as $350 per month with $2500 down for a 36 month lease with 36,000 miles." How does that math work on a $40k car?!?!?
According to Wards, Jan-Feb total sales were 385K, Feb was reported at 207K, meaning Jan was about 178K. So even though GM sales grew by 30K month to month, the inventory level also went up by 7K over January. That should mean they are still producing more cars per month than they can sell. Time to cut some shifts?
Like all modern Wall Street scams, this one seemed to last about 90 days. Someone call Cramer, he was recommending a buy up to $40 the day after the IPO.
Next on deck for all the hot money players, Facebook and Twitter.
For some informational purposes on purchasing new/used Trucks and Cars from car dealers.
If your looking to buy a new or used car/truck start at the wholesale price as your bargaining base.
Wholesale price is Retail (MSRP) x 70%
$41,000 x 70% = $28,700.00 would be your first offer on that new car or truck.
You must take the emotion out of buying a vehicle. "Show none"
If you are buying used you can apply the same formula but deduct .30 cents for each mile on the odometer. Find the retail price (MSRP) for that car/truck in that year and apply the math above. This includes any private sales as well i.e. Craigslist, ebay or Cartrader. Anywhere !
Say a 2009 Ford explorer had a retail (MSRP) of $29,000 in that year and it has 40,000 miles on it.
So $29,000 x 70% = $20,300 wholesale then deduct .30 cents per mile 40,000 x .30 = ($12,000)
So your starting bid/offer for that truck or car would be $8,300.00
I have purchased many vehicles (40+) through these years using this formula for business, family and friends and I know it works. The problem is that people make a car or truck purchase an emotional event.(crying about int/ext color and such) Don't. If the salesman says "your nuts (after you have arrived at "YOUR" price) and thats above my costs" just leave him your name and number, on a piece of paper or card you supply from your pocket, written with your pen or pencil) and tell him "if you want to sell that car or truck call me". Thats it and leave the showroom.
Remember the above math is to establish a basis or base to start the bargaining, move up from there.
good luck !
Walk in like you own the place.
P.S. I was taught this method from a wholesale distributor friend many many years ago. You should have seen this guy at the dealerships sweep the floors with the salesman. He turned it into a game all the time !
It was a sight to behold !
But he always got the vehicle for "HIS" price
God rest his soul !
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