Thursday, May 14, 2009

The Unsold Millions

The other day I suggested, only half tongue-in-cheek, that GM give me a car as a way to reduce their bloated inventory and improve their image. Suggestions that I wouldn't really want a GM vehicle notwithstanding, I have seriously been wondering since then just how many cars are actually sitting out on dealers' lots, unsold and, these days, increasingly unsellable.

The question is difficult but not unanswerable. Wolfram Alpha doesn't come online till tomorrow, so for the next twenty-four hours or so, so it will simply be a matter for my speculation. Through the news of the past few days, however, I've just acquired a tidbits of information which might hint at the answer.

Chrysler just announced that it will close 789 of it's 3200 dealerships across the U.S. This is sad news, of course, for those dealers and their employees, but it shouldn't be a surprise to them or the rest of, should it? After all, the dealers are the ones who have had to look out at a sea of unsold cars and trucks every morning, listening to their reduced sales force literally begging customers to buy something, anything, please, here and how.

So that's my question: just how large is that sea of unsold cars and trucks?

Well, if we estimate that each dealer might have as many as 500 vehicles in inventory, waiting for a buyer who will likely not come for months, if at all, then there could be as many as half a million unsold Chryslers out there. And suppose they each had a thousand cars? A million!

It's more than that, of course. Just the other day, GM announced that it was doubling down on Chrysler by closing 1000 of its 3189 US dealers. That's another half-million to a million vehicles that need, literally, somewhere to go.

So, between the two of them, GM and Chrysler are going to have to move between one and two million cars! That still leaves uncounted the something like another two to four million automobiles that the remaining 4500 plus dealers are holding. The total, by my admittedly rough calculation, is that there are between three and six million unsold cars and trucks in the U.S. And that's just GM and Chrysler!

If you were to add up all the rest, all the Fords, Toyotas, Nissans, Hondas, Hyundais, Subarus, and on and on, why that little three to six million is just a drop in the bucket. Worldwide, these numbers are absolutely crushing.

And these steel-glass-and-rubber behemoths aren't like the zillions of Blu-Ray players and Walkmans that Sony didn't sell last year. Cars just won't stay 'new' in the box in a warehouse for a year. If the car dealers don't sell them soon, I think that they are going to have to simply crush and melt them, the way a farmer plows under a field of withering drought-stricken corn. While we might miss the corn more than the cars, it is a shame to see all that effort go to waste.

Again, I humbly suggest: just give 'em away!

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