Rough winter weather may bring good deals for car buyers
DETROIT — Late last month, David Kelleher had 412 unsold new cars and trucks at his Chrysler-Jeep-Dodge-Ram dealership southwest of Philadelphia. He would have been more comfortable with about 40 less.
It’s a similar scene at other dealers, with cars parked in spaces that were previously vacant.
The auto industry hopes this year to sell more than 16 million cars for the first time since 2007. So, the question for automakers is whether numbers like Kelleher’s simply reflect a bad winter or hint at trouble ahead. For many car buyers they signal something better: deals.
Kelleher, who had to close his showroom for five days due to storms, expects February sales declined but is confident that buyers will return once temperatures rise. Industry analysts note that warmer-weather dealerships fared well over the winter.
But others see signs of the habits that got Detroit into financial trouble five years ago — producing too many cars and trucks, and losing money with hefty discounts to move them off lots.
Kelleher’s inventory was enough to meet demand for 94 days. Normally he likes to have an 85-day supply. Stocks are growing across the nation, too. At the end of January, dealers had an 89-day supply, the highest in five years, according to Ward’s AutoInfoBank. Detroit automakers had the most, with General Motors at 114 days, followed by Ford at 107 and Chrysler at 105.
To unload the inventory, automakers are offering more discounts. That means deals for consumers. Incentives are the highest they’ve been in three years, averaging $2,633 per vehicle in February, according to the TrueCar.com auto pricing site.
