Chrysler Reports Inventory of About 50,000 Unsold Vehicles

October 24, 2006

Some that follow satellite radio believe that the OEM channel is going to become the medium for growth in the SDARS sector. Whether or not you subscribe to that theory, it is good to keep an eye on what is happening with the OEM's, and in particular, those with exclusive deals.

Today it was announced by Chrysler that they have about 50,000 unsold cars that are currently not counted in inventory. This number is down from a peak of about 100,000 earlier this summer.

ARTICLE EXCERPT:

Chrysler Reports It Has an Unsold Inventory of About 50,000 Vehicles

By NICK BUNKLEY
Published: October 24, 2006

AUBURN HILLS, Mich., Oct. 23 — The Chrysler Group said Monday that it had not yet accounted for tens of thousands of cars in its inventory numbers, which are already considered high by industry standards.

Chrysler said it had routinely excluded these vehicles, worth billions of dollars, from its tally of unsold cars and trucks because they had not yet been assigned to a specific dealer or ordered by a customer.

While there are no requirements for how automakers report their inventories, the disclosure has frustrated competitors who say they are being more forthright about their struggles. Chrysler says the practice is common, but other automakers say they abandoned it decades ago, after the oil shortages of the 1970’s caused inventories to bloat quickly.

A Chrysler spokesman, Kevin McCormick, said about 50,000 vehicles were currently unassigned and therefore not included in Chrysler’s inventory figures, adding that the number had been as high as 100,000 this summer.

At an average price of $25,000 each, those 100,000 vehicles would be worth $2.5 billion. By year’s end, Mr. McCormick said, all of the company’s unassigned inventory will be gone.

“We’re actively working with our dealer body to reduce that,” he said. “It’s a number that’s higher than what we would like for it to be.”.........

Interested SSG readers can read the whole story HERE via New York Times

10/24/2006 12:28:00 PM

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