Dealers will start to feel inventory pinch this month
 | Toyota’s Bob Carter: Spreading around the high-demand vehicles |
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Lean inventories will begin to hamper U.S. auto sales this month, a situation that will worsen as global production slows as a result of Japan's earthquake and tsunami.
"Most likely lean small-car inventories will be a headwind on the industry's sales rate," Ford sales boss Ken Czubay said.
Automakers started the month with a 54-day supply of light vehicles, down from 60 days on March 1. And that was before deliveries to dealer lots start to dry up because of closed assembly plants in Japan and global production cuts caused by shortages of Japanese parts.
The first U.S. dealers to be affected will be Japanese-brand stores, as deliveries of vehicles assembled in Japan stop or are sharply curtailed this month.
Toyota is working to make sure U.S. dealers have high-demand vehicles such as the Prius, said Bob Carter, head of Toyota Division.
"While there may be spot shortages here or there, we are prioritizing distribution efforts to minimize those," Carter said.
On a unit basis, the April 1 inventory was flat compared with March 1 at 2.48 million. In terms of days supply, General Motors was the only major automaker with more unsold stock than a month earlier: 75 days on April 1, up from 60 days on March 1.
Chrysler Group had a 67-day supply on April 1. All other major players started April with less than a 60-day supply, which is considered ideal. Ford Motor had a 52-day supply; Toyota Motor Sales, 50 days; and American Honda, 48. The leanest stocks were at Nissan North America, 39 days, and Hyundai-Kia, 31.
But with gasoline prices rising, small-car stocks are thin at several automakers: a 32-day supply of Honda Civics, 22-day supply for Kia cars, a 23-day supply for the Ford Focus and a 43-day supply for the Ford Fiesta.
Most see the production disruption as a short-term factor likely to dampen spring and summer sales but not change this year's total volume. GM kept its 2011 sales forecast at 13 million to 13.5 million. AutoNation's outlook is unchanged at 12.8 million.
"The year will unfold differently from month to month," AutoNation CEO Mike Jackson said. "But the fundamental demand is there -- that has not changed."
Consulting firm IHS Automotive says U.S. dealers with domestic or European brands will be affected as Japanese parts shipments to manufacturers outside Japan also run dry by early May.
"The supplier production squeeze that shut down Japanese auto production is just weeks away from doing the same to American auto production, and is likely to last for much of the second and third quarter," said IHS analyst Aaron Bragman.
He warned that while non-Japanese automakers will have a chance to make inroads on Japanese manufacturers in the spring, they will face their own product shortages by summer.
Bragman said that with American automakers already using Japan-made parts for "everything from Hitachi mass air flow sensors to Merck paint pigments, any advantage they have over their Japanese competitors on dealer inventory is unlikely to last the summer."
Mark Rechtin and Laurén Abdel-Razzaq contributed to this report
You can reach Jesse Snyder at jsnyder@crain.com.
