Car dealers across the country are facing inventory shortages on some of the hottest models, as automakers struggle to meet the rising demands of consumers.
During the downturn, many dealership owners were left with an overabundance of cars for sale on their lots, as automakers still had vehicles left over from before the recession, yet few buyers interested in them. Since the car companies have slashed production at many factories, however, dealers are now facing the opposite problem – not enough vehicles to quench Americans’ increasing thirst for cars.
According to Bloomberg, car supply among the Big Three is down 30 percent at Ford, 43 percent at GM and 53 percent at Chrysler as compared to 2008. Yet analysts surveyed by the news source predict that auto sales will rise to 11.9 million vehicles this year from 10.4 in 2009.
That can only happen, however, if the automakers make enough vehicles to achieve that. Already, the major auto companies have added shifts to factories that produce the most popular models.
One dealer interviewed by the news source said he had requested 100 Ford Fusions in July and received just seven – and he owned the best-selling Ford dealership in the country.
The laws of supply and demand dictate that an inventory shortage for new cars means that prices may soon rise. Those in the market for a vehicle might be better off shopping the used car market, where they’ll also find a wider selection.
A new report by the Troubled Asset Relief Program has found that the United States Treasury Department should have carefully considered its decision to order GM and Chrysler to close hundreds of dealerships while the two companies were in the bailout process.
GM and Chrysler both went bankrupt during the financial crisis, forcing the government to step in and take over the companies’ balance sheets. The Treasury Department rejected GM and Chrysler’s plan to close dealerships over a five-year period, calling the measures “too slow,” and instead asked the two automakers to close hundreds of dealerships immediately in an effort to cut costs. Now, many are questioning the decision, as GM and Chrysler have rebounded to the point that they are reinstating many of the dealers.
Special inspector general Neil Barofsky wrote in his recent report that “such dramatic and accelerated dealership closings may not have been necessary and underscores the need for the Treasury to tread very carefully when considering such decisions in the future”
With the closing of so many dealerships, many lightly used cars have found their way onto the pre-owned market. Drivers in areas with a closed GM or Chrysler dealer may want to head to a used car lot in order to find deals and savings.
Traditionally, automakers only make small changes on models year-to-year, only truly changing the cars with their publicized “redesigns.” However, sometimes automakers make small tweaks to increase a car’s appeal, as they have been doing lately in attempts to improve gas mileage.
Fuel economy has become an important consideration for consumers looking to save at the pump. With that in mind, some automakers are making slight changes to their vehicles in order to improve their EPA-rated mileage, according to the Associated Press.
Honda, for example, has made some slight changes to its popular Accord model for the 2011 model year. Changes to the car’s aerodynamics, gears, and engine friction have increased mileage from 31 to 34 miles per gallon on the highway and 21 to 23 in the city. That puts it in second place of the midsize models for fuel economy, trailing the Hyundai Sonata’s 35 mpg.
Chrysler has also announced plans to make similar changes to its Sebring and Dodge Avenger models, promising large increases to their current ratings of 21 city/30 highway miles per gallon.
Those looking to save money might want to look at fuel efficient used cars, as they will save money not only at the pump, but also at the dealer.
In the wake of the massive Toyota recalls, the National Highway Traffic Safety Administration is cracking down on auto companies’ safety defects more than ever. The two latest brands forced to recall vehicles are Ford and Chrysler.
According to Reuters, Ford will recall 33,700 of its Transit Connect commercial vans, due to an interior liner flaw that may not properly protect a driver in case of a crash. The vans are popular among small businesses and similar ventures.
“In the event of a vehicle crash, an occupant could be at increased risk of injury,” the NHTSA summarized in a letter to Ford.
Meanwhile, Chrysler will recall 22,000 of its 2010 model Dodge Nitro, Ram 1500, and Jeep Liberty and Wrangler trucks and SUVs, due to a tube problem that may leak brake fluid.
Those in the market for a vehicle may want to avoid new cars until recalls and defects are sorted out. Small businesses, for example, may opt to buy a used Ford Transit with no history of defects in order to ensure their business runs smoothly and uninterrupted by safety recalls.
As a further sign that the economy is beginning to recover, Detroit’s Big Three automakers: GM, Chrysler, and Ford, all posted big gains in the month of May over the same time last year. With consumer confidence returning and Americans making car purchases that they may have held off on in the wake of the economic downturn, consumers should remember that they can purchase many of these cars for considerably less at used car dealerships or auctions.
Ford gained the most, with a 20 percent increase over previous years’ totals. Ford is in good shape, as the only one of the Big Three not to accept federal bailout money and thus not have to pay it off, according to the Washington Post
GM sales increased 16.6 percent, and Chrysler sold 100,000 vehicles for only the second time in two years.
Among Japanese automakers, Nissan jumped 24.1 percent while Toyota sales slowed amid recall problems.
Although the industry itself may still be recovering, the country is not yet out of the woods. Consumers who need to save money can look at these brands’ ample offerings on the used car market.
Chrysler has reportedly dropped the Sebring name in favor of Nassau for its updated midsized sedan that will be rolled out later this year, according to the Detroit Free Press.
A company spokesman declined to confirm or deny the report, but industry analysts say this could be one of Chrysler’s moves to improve the image of the Sebring, which was criticized for its poor quality and cheap interior.
“Chrysler is desperately looking to restore its credibility with the public, and dropping the Sebring name, long associated with cheap interiors and spotty overall quality, seems a no-brainer,” writes Motor Trend.
Chrysler has in the past named its models the New Yorker, Fifth Avenue, Cordoba, Saratoga, Windsor, and, most recently, the Aspen and Pacifica. Nassau, the capital of Bahamas, may just be an addition to its string of touristy nameplates, MLive.com reports.
The Sebring dates back to the mid-90s when Chrysler launched the “cloud cars,” mid-sized four-door sedans which includes the Chrysler Cirrus, Dodge Stratus and Plymouth Breeze.
On Saturday, the Leake Auction House in Oklahoma City helped raise money to benefit earthquake relief efforts in Haiti by auctioning off a Chrysler 300 autographed by over 250 celebrities.
Two car aficionados, Richard Freeman, owner of Elite Motorsports, and Marty Robertson, proprietor of Evolution Custom Auto, together made the winning $100,000 bid to take home the custom piece of automotive memorabilia, according to NewsOK.com.
Leake Auction also offered to donate their $10,000 commission fee to the American Red Cross in order to do their part.
“People have really opened their hearts to help Haiti,” said the auction house’s president Richard Sevenoaks, quoted by the news source. “[We are] honored to do our part.”
The event also raised an additional $2,400 in cash donations.
The special edition Chrysler 300, which is currently one of the more popular options in the large sedan segment, was autographed by hundreds of big-name celebrities at last month’s Golden Globe awards. The American automaker donated the car last month to the Stars for a Cause foundation, a non-profit that hosts a celebrity charity event every year.
Five years ago, the 2005 Chrysler 300 “daringly re-invented the great American sedan” and won the prestigious Motor Trend Car of the Year award. Prospective car buyers in the market for used Chrysler models in New Jersey may be interested to learn why.
In 2005, the staff at Motor Trend tested 24 of the most highly acclaimed new vehicles from almost every genre. They searched for the car, truck or SUV that best represented superiority in its class, exceptional value and innovation.
“The Chrysler 300 is an extremely compelling combination of power, responsiveness, room and refinement,” said Angus MacKenzie, editor-in-chief of Motor Trend. “A home run on significance, a slam dunk on value and clearly superior to its rivals in every way.”
The Chrysler 300C is available with a 5.7-liter 340-horsepower Hemi engine that can go from 0-60 in 6.3 seconds while carrying over 4,000 pounds on its back, Automotive.com reports. The ride is smooth, comfortable and quiet.
In 2005, a brand new 300 cost anywhere from $23,595 to $33,000 depending upon engine size and additional features.
Used Chrysler models in New York may become more popular following a recent announcement that the auto giant will be recalling over 24,000 new vehicles due to a potential brake defect that could result in sudden brake failure.
Chrysler Group said in a filing with the National Highway Traffic Safety Administration that the recall applies to the 2010 Dodge Avenger and Nitro, Jeep Liberty, Commander and Grand Cherokee and the Chrysler Sebring, according to Yahoo News.
The car manufacturer said that the clip retention tab on the brake pedal pin was not properly formed or installed in some vehicles. Chrysler has stated that it is not aware of any accidents related to the brake defect.
“The quality control systems in place caught the issue early,” Chrysler Group said in a statement, quoted by CNN.com. “All affected assembly plants held vehicle inventory and inspected for and replaced the clips as necessary.”
A safety recall will most likely begin at the end of January. The brake issue was reportedly discovered by factory workers in Chrysler’s Toledo and Saltillo plants.
Gearheads likely know that many automakers have a performance division, such as Nissan’s NISMO, or General Motor’s aptly named GM Performance. An update to the classic Mopar’s list of offerings could be a reason to check out used Dodges in New Jersey, as well as Plymouths and Chryslers.
The company has upgraded its website and introduced new product offerings for people looking to get a little more performance out of their cars and trucks, with crate engines featuring the classic Hemi, as well as interior upgrades like live mobile TV.
Mopar recognizes that it needed to get into the web to maintain its customer base, and that means that owners of used Dodge Rams in New Jersey can check out different parts without leaving their computer chair.
“Over the past year, approximately 40 percent of consumers who were in the market to purchase parts and accessories have shopped online,” said Pietro Gorlier, the firm’s president and CEO. “Our Mopar eStore addresses this market and will be a critical sales channel for the brand.”