It's a lean month on dealer lots
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June 14, 2010 01:00 AM

It's a lean month on dealer lots

48-day supply is 5th-lowest in 19 years of counting

Jesse Snyder
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    Inventories: The story and the history
    Days supply for the 7 top-selling groups
     1-Jun-101-Jun-09
    Hyundai-Kia4152
    Nissan/Infiniti4253
    General Motors4791
    Chrysler Group4986
    Honda/Acura4973
    Ford Motor Co.5058
    Toyota/Scion/Lexus5041
    Source: Automotive News Data Center
     
    The days supply of light vehicles on June 1 was the 5th-lowest on record. But the months with lower supplies followed extraordinary events in the industry.
     Days supplyPrior month sales
    1-Jun-10481.1 million
    Sept. 1, 2009301.3 million (cash for clunkers)
    Aug. 1, 2005421.8 million (top month ever)
    Nov. 1, 2001451.7 million (“Keep America Rolling”)
    1-Jul-98461.6 million (supplier strike)
    Source: Automotive News Data Center

    When automakers pledged to slash inventories, they meant it.

    U.S. carmakers and dealers started the month with the lowest stocks for any June on record -- a 48-day supply of light vehicles -- and the fifth-lowest for any month in 19 years of records.

    The only months in which the days supply was lower followed extraordinary events in the industry: cash for clunkers last August, a U.S. sales record of 1.8 million vehicles in July 2005, the post-Sept. 11 "Keep America Rolling" campaign in October 2001, and a lengthy supplier strike in 1998.

    But last month, sales totaled 1.1 million -- the worst May in more than two decades, except for a year earlier.

    The days supply figure is calculated by using the daily selling rate of the previous month. So getting to a low days supply with May's lackluster sales took really low inventory units. The 2,055,400 unsold units constituted the seventh-lowest on record, higher only than the stretch from Aug. 1, 2009, to Jan. 1, 2010.

    Matching production to demand is a perennial battle for automakers, with most seeking equilibrium at about a 60-day supply.

    During the slump, balancing inventories became a survival skill. Dealers struggling to finance floorplans during the credit crunch ran thinner inventories. Ford Motor Co. and other automakers worked to cut inventories.

    To help dealers turn stock faster, Ford reduced model complexity. The goal is to sell more with less inventory, said George Pipas, Ford's chief sales analyst.

    This month's unsold stock shows nearly everybody running lean.

    All large automakers started June well under the 60-day barrier, and all but Toyota reduced stock on a days supply basis compared with 2009.

    Including the smaller players, the only automaker flush with stock is Suzuki. Its 8,600 vehicles on hand is virtually the same as last year at this time. But because Suzuki sales so far this year have plunged 53 percent, that's enough to last 117 days.

    CA7012068.PDF

    U.S. car and light-truck inventories, on June 1 - 06-14-2010

    CA7012068.PDF >
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