Auto supply shortages in the US and impact

An article in the Wall Street Journal (September 3,2013) describes supply constraints faced by US auto dealers for cars made by Nissan, Ford, Toyota and Honda. Dealers report having significantly lower inventories, one car instead of the normal 15 in one case, with just enough to satisfy demand. Reasons provided include a reluctance by automakers to build up inventory, a reduction in customer sales incentives, planned transition to newer models etc. But will a reduction in inventory also imply giving us sales and thus market share ? Will making consumers wait for new cars become the norm in the US ? Will a strategy of pruning inventories and thus sales incentives increase manufacturer profits ?

About aviyer2010

Professor
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One Response to Auto supply shortages in the US and impact

  1. Qiutong Zhang says:

    Company are tend to “0 inventory” right now to reduce inventory cost. Instead of keeping inventory at warehouse, Ford,Toyota and the others use fast response to order. When they receive a order from the customer, most of them will assemble it and after a few weeks the customer can reviece the car. It is a best way to reduce the inventory but some customers are not satisfied the long waiting time. Auto company may think of giving some incentives or discount to the customers

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