Inventory shortages that had many General Motors Co. dealers complaining about lost sales this summer largely have abated in the past two months, according to an Oct. 25 dealer survey by Automotive News.
GM has been increasing production to alleviate shortages stemming from its 2009 bankruptcy and the subsequent reinstatement of 806 dealerships that the automaker had planned to eliminate.
GM has about 4,500 U.S. dealerships.
Tom Krebsbach, general manager of Merit Chevrolet in Maplewood, Minn., near St. Paul, feels better about his inventory today than he did in May. With 175 cars and trucks at the dealership and 85 scheduled to arrive by early December, Merit has 50 percent more inventory than it had in May, Krebsbach said.
The 144 GM dealers who responded to the Automotive News survey tended to agree.
Asked whether they had the right amount of inventory, 43 percent said they did, 47 percent said they still had too little, and 8 percent said they had too much.
In a similar survey Aug. 16, 87 percent of 84 respondents said they lacked sufficient inventory.
In the Oct. 25 survey, 65 percent of respondents said new-vehicle inventory had increased at their stores since July, while 35 percent said it had not.
Merit, which sold 711 new vehicles last year and 770 used vehicles, needs about a 75-day supply to keep customers happy, Krebsbach said. With less than that, customers may be unable to find the vehicles they want and may shop elsewhere, he said.
Moreover, a lack of inventory could keep Internet shoppers from coming in, he said. If those shoppers don't see the vehicle they want listed in inventory online, they search until they find it at another dealer, Krebsbach said.
That's crucial, given that 85 percent of buyers start their quest online, he said.
Broome Cadillac in Independence, Mo., has a little more inventory than the store typically likes to keep, said dealer Paul Broome.
He said that when he ordered vehicles from the factory this year, he expected a little faster sales pace than has materialized. Also, a nearby competitor that was scheduled to close kept its franchise. Broome expects to sell about 170 new Cadillacs in 2010 and 300-plus used vehicles.
He said he has about a 120-day supply of new vehicles, which is several days more than he'd like to have.
"We're going into a slower selling season," Broome said. "We may have to tweak things depending how we finish the year."