Ten cars people won’t buy, according to 24/7 Wall St.
Auto dealer inventories are at five-year highs. The most important effect of this for consumers is that dealers and car companies will soon open up another aggressive round of discounts and attractive financing to move the poorest selling vehicles off the lots.
Inventories, probably larger due to poor weather, are actually big enough that the car companies even have deals on their best selling vehicles. General Motors Co. (NYSE: GM) has seen poor sales of its flagship Chevy Silverado pickup, and the discounts it has been forced to offer are extraordinary to the point where the media has battered Chevy’s sales prospects. Ford Motor Co. (NYSE: F) has been discounting its flagship F-150 pickup, the top-selling vehicle in the U.S. based on unit volume.
The brands that are in real trouble are those which have models with average inventories (also known as “days to turn”) which stretch more than 100 days. Car companies usually have 60-day inventories across all models. Inventories of hot selling cars can have average as little as 20 days.