Cuts in production at General Motors and Ford Motor Co. have reduced both automakers' supplies, but they are still above ideal levels.
GM slashed its supply to 73 days on June 1 from 87 days a month earlier. Ford cut its supply to 75 days on June 1 from 87 days on May 1.
That's good news because it means auto supplies "should be in line" by the fourth quarter, says John Casesa, a Merrill Lynch analyst in New York. GM is in better shape than Ford, he says, and the extension of the GM employee discount to most buyers will help reduce supply even further.
Casesa says Ford is about one quarter behind GM and still is struggling to lower its supply of light trucks. "We think Ford needs to cut production further," he says.
GM lowered its truck supply to 84 days on June 1 from 108 days on May 1. But on June 1, GM had a supply of 100 or more days for 15 light trucks, including 571 days for the Pontiac Montana and an estimated 409 days for the Saab 9-7X.
Ford Motor had an 89-day supply of light trucks on June 1, compared with 101 days a month earlier. It had seven light trucks with supplies of more than 100 days. The highest was a 307-day supply of the Mercury Monterey.
Generally, a 60-day supply of vehicles is thought to be ideal.
The Chrysler group had a 65-day supply on June 1, down from 79 days on May 1, making it the leanest of the Big 3. DaimlerChrysler, including Mercedes-Benz, had a 64-day supply on June 1, down from 77 days.
The total days supply of U.S. light vehicles fell dramatically to 61 days on June 1 from 71 days a month earlier.
Mini had the fewest cars on hand, a seven-day supply on June 1, down from nine days on May 1.
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