In a recent Automotive News report, it outlined the problem. According to J.D. Power & Associates, at the peak of the GFC in 2009, Chrysler cut its production by 50 percent, General Motors cut its production by 44 percent and Ford, the only US car manufacturer that didn't file for bankruptcy, decreased its output by 16 percent.
Even though the GFC is now over, these manufacturers are still worried about over-producing. And they don't want to run into the same problems, such as having old models sitting around that end up being sold at special prices. A spokesman from General Motors, Tom Henderson, said in the report,
“We're working awfully hard to provide the additional capacity to meet that demand. But we don't want to go back to the days where we had overcapacity and had to use a lot of incentives.”
The Automotive News report also quoted the owner of one of the best-selling Ford dealers in American (Galpin Ford), Beau Boeckmann, as saying,
"I am begging for inventory across the board. I couldn't sleep a year ago because I thought, ‘We have a year's supply of these cars!' And now I'm worried about our inventory again because we don't have enough.”
And it's not just Ford dealers who are suffering, General Motors is too. Owner of several Chevrolet dealerships, Gordon Stewart, said in the same report that General Motors simply isn't making enough Equinoxes to fulfill the requests he's had. He says Equinox sales could have tripled or quadrupled had he had plenty of stock to sell.
"The requests mean nothing. They appreciate the requests, but it does nothing for what they can produce," Gordon Stewart said about the GM supply.
Which brings back the same pickle; do the companies slightly over produce or do they run short and potentially lose out on money they could have made?