Stuck to the Dealer's Floor – Inventory Numbers Tell the Story
- November 16, 2006
- Auto XPRT Speaks..., Buick, Cadillac, Chevrolet, More Categories...
- Posted by George Peterson
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Which cars and trucks are planted to the dealer’s floor? In other words, which vehicles take the longest to sell? Who cars? Why does it matter, anyway?
Well, while it may not seem that important to you, it’s critically important to the industry s a whole… from the manufacturese, component suppliers, dealers and quite a few financial institutions. First, if you know the time it takes to sell a vehicle, you know how much it is dragging on the dealer’s floorplanning costs. Floorplanning is the term for the amount it costs the dealer to finance the a vehicle in inventory waiting to be sold. If a vehicle has been hanging around for weeks, he’ll be more likely to deal aggressively to get rid of it. Also, vehicles that have high days supply may be less popular. From that perspective, they may be the ones you want to stay away from.
Lets take a look at the vehicles with high days supply as of November 1, 2006 as reported by Automotive News. We’ll use 115 days supply as a benchmark (60 days is when manufacturers are comfortable with their inventory levels – that means they have adequate inventory to meet the demands of most buyers):
208 days: Pontiac Montana SV6… is the word out that the Montana is being discontinued? Will it be missed? Probably not. Regardless, it looks like dealers will have the apparently unloved Pontiac minivans on their lots well into the next model year.
192 days: Pontiac GTO… OK, GTO is out of production and Buick-Pontiac-GMC dealers have a lot of them on their lots. The 2006 version looks pretty spiffy with a stronger looking hood and front end plus the powertrain is great. If you want a high value big rear wheel drive sporty car, GTO might be a great buy right now. In a way this is where the concept of “days supply” gets dicey. You see, there ain’t no more GTOs in the pipeline, so as sales continue, the days supply will drop precipitously compared to vehicles still in production
188 days: Cadillac XLR… maybe because it is a very expensive sports car, we shouldn’t include in on this list. Also, dealers don’t sell very many. But still, it seems there are too many XLRs sitting on dealer lots. Actually, the concept of days supply for pretty much all low-volume cars is the closest thing to irrelevant on the sales side of the auto business.
182 days: Volkswagen Touareg… OK, since Touareg is not selling up to expectations, you don’t have to learn how to spell it. Touareg is a nice package for an SUV and should sell in respectable numbers. Rumors (and facts) of quality problems are rampant. With the high-demand V10 TDi model in hyper-short supply, it’s obvious the dealers aren’t being very successful in moving V6 or V8 gasoline-fueled Touaregs to turbodiesel intenders.
179 days: Nissan Quest… Quest got a major, major interior redo for the 2007 model year and those vehicles should now be at Nissan dealers. While the exterior looks pretty much the same, the interior is much more conventional than before. The most controversial of the three excellent Japanese-brand minivans, Quest has had a tough time in the market. Nissan dealers should be willing to talk seriously about this one.
166 days: Pontiac Torrent… the soon-to-become GMC Torrent does not appear to be setting the world on fire. A mild derivative of the Chevrolet Equinox Mid-Size Crossover SUV, Torrent should do better. Maybe you could pick up the Pontiac version of the Equinox for a nice discount. Comes with that 100,000 mile GM powertrain warranty, too.
165 days: GMC Canyon… Mid-size Pickup with 4 and 5-cylinder engines has never caught on. Built to Spartan specifications with an Isuzu design team, the concept of Canyon and Chevy’s Colorado were flawed from the beginning. Add a V6 and upgrade the interior and trim and Canyon will sell better.
144 days: Mazda Miata… er, MX-5… another victim of kneejerk name changing, MX-5 plugs along month after month, year after year selling respectable numbers for a small sports car. Going into the late Fall and Winter months Mazda dealers may be more than willing to cut a deal. Now, if you live in the Snow Belt, be sure to opt for the power retractable hardtop. Just don’t expect much of a deal on that one.
143 days: Chevrolet HHR… Chevy’s Heritage High Roof (HHR) has been selling at a good clip – higher than our initial estimates, but it looks like the plant is pumping out more HHRs than Chevy dealers can move. A panel version for 2008 may goose it a little, but right now looks like there may be good deals to be had if you want a retro wagon.
141 days: Dodge Stratus… couldn’t be out of production soon enough. Sales had effectively stopped. New 2008 Dodge Avenger replaces Stratus in early 2007.
132 days: Buick Terraza… never heard of Terraza? Minivan from Buick? Clearly Terraza is a tough sell for Buick-Pontiac-GMC dealers.
128 days: Saturn Vue… Vue has suffered from its 2006 restyle where its snout looks like it is sucking lemons. Instead of making Vue look stronger, the 2006 freshening made it look weaker. The current Vue will become damaged goods as soon as Saturn unveils the all-new 2008 model at the Los Angeles Auto Show at the end of the month.
126 days: Dodge Dakota… sales of Dakota softened drastically with fuel price spikes and have not recovered. Lots of good competition makes Dakota a price buy today.
125 days: GMC Yukon XL… the new GMT 900 Yukon XL (same same as Chevrolet Suburban) has been out since 2nd Quarter 2006. Very nice vehicle that is just in the wrong segment. Launched just as gas prices were going through the roof, the image of very large SUVs as gas hogs bogged down Yukon XL sales. If you want a big SUV, now is the time to jump.
124 days: Buick Rendezvous… a folly for the few years it has been in production with weird Aztek-like proportions, the Rendezvous is now going out of production. Hooray!
123 days: Mazda RX-8… Mazda’s four door rotary-powered sports car has not had the luck Mazda was hoping for. Does not move off the dealer lots fast enough. Nice car, good styling, maybe good deals right now.
123 days: Chrysler Aspen… new luxury SUV based off the Dodge Durango. May take some time to catch on. Advertising just beginning. Also, segment remains soft.
122 days: Chevrolet Suburban… the new GMT 900 Chevrolet Suburban has been out since 2nd Quarter 2006. Very nice vehicle that is just in the wrong segment. Launched just as gas prices were going through the roof, the image of very large SUVs as gas hogs bogged down Suburban sales. If you want a big SUV, now is the time to jump.
121 days/152 days: Mitsubishi Eclipse/Spyder… sporty coupes have become tougher and tougher to sell. The Eclipse is relatively new and the Spyder is a desirable bodystyle in the SunBelt, but the segment is fading. Being a big fish in a pond that is drying up is not desirable.
121 days: Chrysler Sebring… not a surprise, old Sebring had faded into the woodwork and new Sebring has just been released.
120 days: Mercury Milan… the high days supply of Milan is a surprise. Nice car that won AutoPacific’s 2006 Ideal Vehicle Award for its class, Milan deserves to fly off the dealer lots.
118 days: Jeep Compass… jury is still out on the Compass. Who will buy it? Is it the chick’s Jeep? Possibly dealers are having a hard time figuring out how to sell it.
117 days: Honda Ridgeline… Honda Ridgeline is a good vehicle. But maybe folks don’t know what it is. Ridgeline won AutoPacific’s Vehicle Satisfaction Award and Ideal Vehicle Award for its category as well as the AutoPacific/IntelliChoice Motorist’s Choice Award. So, for folks who are buying it, and who understand it, Ridgeline is doing the job. Maybe Honda dealers will deal on this one.
116 days: Mercury Montego… the overall winner of AutoPacific’s 2006 Ideal Vehicle Awards, the Montego does many things very well. Its buyers love it. Montego should do much better.
115 days: Mercury Mariner… Mercury Mariner was a late addition to the Ford Escape/Mazda Tribute plants. Mariner has just enough styling difference to set it apart from its stablemates. The 2008 Mariner is further differentiated and should be stronger in its very competitive market segment.