Car Dealers Complain About Not Having Enough Cars to Sell

The American car makers seem to limit their production in an effort to increase per-sale profit levels, while at the same time reducing rebates. The decades old habit of producing too many cars and then selling them at discount costs has proven to be unprofitable, so a change is underway which is thought to be too drastic according to Detroit dealers.

Galpin Ford is the largest Ford dealer in North America, but in July only seven 2010 Fusions were delivered by Ford, although 100 such sedans were requested.

General Motors seems to have the same policy, according to dealerships in Michigan, Georgia and Florida. Equinox production seems to be far below the levels of the demand. All over the U.S. the Equinox was sold well in the past months and General Motors announced its plans to increase production.

General Motors and Chrysler overcame the bankruptcy they were facing in 2009 but the total production went down to only half for the year. Ford only reduced production with 16% for 2009. Although 2010 seems to offer sign of stabilization, the production will continue to be limited in comparison to 2008 levels.

Ford does not seem to plan on increasing production of its current models as they see demand as being fragile in an economy that is slowly recovering. The tendency to limit the production has been present with Ford since 2005. They consider that this trend has been healthy for both the car maker and its retailers. Dealers can turn inventory faster and still get sales with lower expenses related to floor-plan.

Dealers are complaining that their effort to drive sales back to the levels before the recession is impaired by the discipline imposed by automakers. The reason behind this newly imposed discipline is that profit per vehicle has to be preserved in order to please the investors. The largest dealer group in U.S., AutoNation Inc. considers that lower inventories are helping the auto industry to recover.

Shortages of new and redesigned models including Cadillac SRX are registered by all dealerships. The redesigned Ford Explorer will reach dealerships in December 2010 and customers seem to be anxious to buy it.

Chrysler dealers have to wait longer for redesigned models as well. The 2011 Jeep Grand Cherokee was introduced in June and new versions will be released in autumn for Dodge Charger and Durango. The Sterling Heights plant in Michigan was scheduled to close in 2012, but this year they added a shift to be able to cope with the demand for the models produced there. The Jefferson North plant in Detroit might also add another shift in order to cope with larger production numbers for Grand Cherokee.