Despite shaky economy, days supply is steady

Every other variable has gyrated - sales, profits, incentives and the U.S. economy - but automakers have cut production enough to keep the industry days supply remarkably stable.

The days supply was 58 days as of Oct. 1 - equal to a month earlier, and the fifth consecutive month below the 60-day benchmark. Those ho-hum numbers are remarkable, considering the uncertainty in the market, and that sales fell 12.5 percent in an up-and-down-and-up September.

The flat days supply wasn't accidental. George Pipas, Ford Motor Co. sales analysis and reporting manager, said that since the terrorist attacks, executives have met weekly instead of monthly to review the company's sales compared with production. Ford wants to avoid building too many vehicles.

Ford had a 62-day supply on Oct. 1, down from 65 on Sept. 1. Ford's third-quarter production was down about 12.7 percent, to about 813,000.

DaimlerChrysler, including Mercedes-Benz USA Inc., had a 74-day supply on Oct. 1, up from 71.

Gary Dilts, senior vice president of sales for the Chrysler group, said his group also is planning from week-to-week.

For the industry, the days supply has varied only one or two days since June 1. But the units in inventory is down almost 500,000, to just over 3.1 million.

That's another way of saying the sales rate has slowed, because a smaller number of units corresponds roughly to the same number of days supply.

You can reach Jim Henry at autonews@crain.com

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