Major oversupply on dealership lots means deals on new cars


Looking for a sweet deal on a new car? Several vehicles are overstocked on dealer lots and certain to be priced to move.

This latest development comes at a time when the car business is otherwise booming. Yet The Wall Street Journal  reports that while the Japanese automakers are doing well, the Detroit automakers are slowing.

What’s behind the success of the Japanese, who were on the ropes a year ago in the after-effects of the tsunami? Detroit-style marketing, that’s what!

The Japanese automakers are offering major incentives. Honda is up to nearly $2,500 and Nissan is up to over $4,000! They’re also doing a lot of zero percent interest financing — another key Motown move.

At the same time, both domestic and foreign brands are seeing a large oversupply of vehicles on dealer lots.

In the auto business, a 55-day supply is considered ideal. That’s the theoretical number of cars that if manufacturers didn’t make another, dealers could sell what they have on the lot for 55 straight days. Fifty-five days represents a healthy inventory cycle.

Yet the Toyota Avalon has a 120-day supply. The Ford Fiesta has a 124-day supply. And the Dodge Dart has a 6-month supply! If you’re into trucks, the Chevy Silverado has an almost 5-month supply, and the Chevy Cruse has a 3.5-month supply.

It stands to reason that dealers will be in the mood to make a deal on cars that represent extreme oversupply. So you can always find a sweet spot in the market — even when the auto business in going great guns!

  • Show Comments Hide Comments