MALLEN: DO YOU SEE EXPLOSIVE GROWTH IN CAR DEALER INVENTORIES?
The car business is absolutely in the toilet, my friends. I just got back from two trips to the Midwest and must have passed at least 15 car lots going to and from.
Every single lot I saw except one appeared loaded to the gills with cars. This goes for Toyota and everybody else too. Even Hyundai and Ford. The only lot I saw that was not loaded with inventory was a Saab lot, but of course, they recently went out of business, right?
And GM of course, has stuffed its dealers with an unbelievable number of vehicles. If this doesn't pick up soon, some of those dealers will probably not need to order much until the 2014 models come out!!
MALLEN: What do your friends in the business tell you?
"The car business is absolutely in the toilet, my friends"
Let's assume, for the sake of conversation, that you are correct in saying that car lots are "loaded to the gills". This does NOT support your opening line that "the car business is absolutely in the toilet". All it would show is that, despite steadily increasing sales over the last three years (from less than 10 mil./yr. to more than 15 mil./yr.) manufacturers have increased production even more. So, if your point was that car production will need to slow down, you may be right. Unfortunately, that wasn't your point. A more than 50% increase in the rate of sales over the past three years and continuing strong sales today hardly suggests a business "in the toilet".
My friends in the business tell me they wish they had a Toyota, Mercedes, BMW or a Hyundai franchise instead. Others tell me they wish they were NOT in the business.
All manufacturers manufactured some sales by aggressive incentives. That is always a good ending for a bad beginning They may have to reflect the toll those sales, and incentives took in their 2013 sales.
Market can only absorb so many sales. Whether you sell them, or give them away.