Top 10 New Vehicles that Languish on Dealer Lots
Anyone who has to manage an inventory of products, no matter the type of business, has to find the perfect balance. On one hand, the customer must benefit from the widest selection, but on the other, products can’t sit around on the shelves for too long, especially if they have an expiry date. It’s also the case with the automotive industry, new vehicles in particular.
As we all know, new cars are stamped with model years, at least in America, which makes them lose value on an annual basis, whether they’re on the road or parked on dealer lots. Dealerships can’t keep these vehicles in stock too long, especially if they were purchased from the manufacturer through financing.
An interesting statistic calculated in the United States every month is the number of days in inventory of makes and models. In theory, a high number means a model stagnates and has trouble finding buyers. In these cases, substantial rebates or financial incentives will likely be offered to liquidate inventory. Sometimes, a manufacturer will interrupt production at the assembly plant in order to reduce inventory, temporarily laying off its employees. For example, a number of 100 means it will take one hundred days to sell what’s in stock.
Inversely, a low number of inventory days usually means the model sells well, at the detriment of a wide selection for the consumer. A number of 30 hints that there are just enough vehicles in inventory for a month of sales. Manufacturers that skilfully master their inventory are Subaru (26 days of inventory), Volvo (27), BMW (42), Toyota (46) and Mercedes-Benz (51). The worst are Mitsubishi (125), Fiat Chrysler Automobiles (82), Ford (73), the Volkswagen Group (72) and General Motors (71). The industry average currently is 63 days.
So here are the top 10 vehicles in the United States with the highest number of days of inventory, or the ones that are currently languishing on dealer lots. The numbers were recorded on January 1st, 2017.