It's always a little troubling when dealers stop ordering cars, or even just cut back a bit, as some of the big General Motors dealers seem to be doing. It's especially troublesome at this time of year, when dealers normally would be building inventory for the new model year.
It means dealers have too many unsold 2004 models sitting around collecting dust. It also likely means production cutbacks because the factories don't want cars and trucks piling up on their lots either.
Huge dealership lots that go on for acres and offer consumers nearly every model configuration for immediate delivery are pretty much a North American phenomenon.
There are a couple of reasons why. Americans tend to be impulse buyers. When we make up our mind that we want something, we want it now. That's why dealers build inventory, so we can walk in and buy a car or truck that's in stock and drive it home today.
And as dealerships get bigger and follow their customers to the wide open spaces of exurbia, they have room for car lots that stretch as far as the eye can see.
That's not the way things are done in most other parts of the world. Usually, if you want a car you must order it and wait until it is built and shipped. That can take months, depending on where you are and what model you want.
The system isn't so good for impatient consumers, but it means less of the dealer's capital and/or credit line is tied up in inventory.
But there can be pitfalls under that system, too.
In Germany, a growing number of customers are ordering cars they can't afford to pay for. Automobilwoche reports that more German dealers are being stuck with cars ordered by customers who back out of the deal.
One dealer says it's almost as if skipping out has become a national sport.
It sounds like a problem for dealers, though I know they'll figure out how to get a steeper, non-refundable deposit and probably make a profit on the orphaned vehicles.
But it's also a good thing. Customers walk away from vehicles they've ordered because they've had plenty of time to reassess their situations.
That's better than the impulse buyer who doesn't get buyer's regret until the car is sitting in his driveway. Or worse, an impulse buyer who doesn't realize he can't afford it until it's time to make the first payment.