Why is AutoNation having a problem with its inventory? Why is this also a problem for the manufacturers such as GM, Ford and Chrysler? How is this problem impacting the business performance of AutoNation and of the auto manufacturers?
Vehicles like SUVs and pickup trucks become sales pariahs the question comes that booms is whether the automakers would still be able to sell every car they have. With the lethal combination of a slumping economy, tight credit, depressed homebuilding, and record high gas prices, Americans can't afford to buy as many new cars as they once did. And the models they want are smaller and more fuel-efficient. Even with deep discounts and heavy incentives, the rows of unsold Dodge Rams and Chevy Trailblazers parked in front of dealerships across the country barely seem to thin. Unlike Shaws or Wal-Mart none of these manufacturers do buy backs of the merchandise a retailer doesn't sell to a consumer. The misconception many people have about new-car sales is that the automaker is actually doing the selling to consumers but in reality, a manufacturer sells to a dealer, and it's up to the dealer to retail the inventory and in this case it’s the same story with AutoNation they are being loaded with the unwanted inventory which results in stocking up there yards and also getting them costs such as interests on the money that had been borrowed from the bank.
I would interpret my research in sort of an example from the car industry itself say for instance a dealer buys a new vehicle at wholesale from the factory, it's up to them to sell it, because there is no such defined period in which he might be able to sell that car. It may take longer than they'd like, and they may not get the price they want, but sooner or later, all new vehicles get sold. When looking up at the statistics the average number of days for a complete turnover of new-car