The US has a consumption-based economy – it desperately depends on people buying stuff. When inventories build, either companies are way too optimistic predicting demand or demand is weaker than it normally is.
In 2015, car inventories surged to their highest level since 2008.
Given the major car manufacturers have been in business for, like, 100 years, I’m guessing they’re pretty good at predicting demand. The fact that inventory levels are so high hints at a weakening consumer…a consumer who, perhaps, would like to buy a new car, but is content with sticking with the one they have.
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0 thoughts on “High Car Inventories (8/12)”
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nice comment
Jason
This one I will take issue on. As a former big three engineer I know something about the auto industry. GM is adding a shift at Grand river Assembly to meet demand. The automakers have inventories just the wrong inventories. The automakers must have a corporate average fuel economy. To do so they must make so many of each model. When gas prices were high trucks lined the lots. Now I suspect the reverse. The auto industry is stuck with a ton of small cars which they lose money on every car yet are selling trucks.
Interesting…can’t keep trucks on the lot…can’t get rid of small cars.