Inventory Numbers Skewed, Dealers Screwed?

Recently there have been some newsy bits about unsold vehicle inventories staying manageable and not ballooning to incredible heights with the recent slowdown in auto sales. This trend has been attributed to that fact that manufacturers have exercised better control of production and dealers not keeping as many vehicles in stock due to rising floor planning costs. The industry averages being tossed around in conversations are about a 70 days supply currently verses a 60 days supply last year.

A bump of only 10 days looks pretty good considering the disastrous year that we are having. However, there is one small problem. Days supply numbers are estimates based off of sales forecasts. Given the recent cliff that auto sales have driven off, it's hard for those forecasts to accurately portray what dealers are seeing out in the field. The end result is that those 'days supply' numbers are off, way off and are in fact much higher than they are shown to be.

Just how bad is it out there? Well, some dealers are saying that multiplying those inventory numbers by two isn't unreasonable. An industry average of 120 days would be a worst case scenario and I don't expect the market to hit those kind of numbers. My best hope for the industry is that we'd see another 10 or 20 day bump in days supply, but in the current 'shaken snow globe' of a market that we're in it is impossible to really predict any outcomes with a reasonable amount of accuracy.