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Automotive Overproduction Comparison
November 4, 2007

How GM Handles a Hit: Build Fewer - WSJ.com

The WSJ had an article today about how GM is trying to avoid overproduction of hot new vehicles (like the Buick Enclave) so that they don't have to dump inventory to rental fleets or resort to using incentives and discounts to move metal. Both of those practices harm resale value, which is one buying point for many customers.

I read recently how Toyota's goal is to build one car less than customer demand, always keeping that in balance.

So how does Toyota compare to the "Detroit Three" in terms of inventory levels and avoiding overproduction? This graphic from the article tells quite a story.

Toyota has half the inventory of GM, Ford, and Chrysler, not just in total numbers, but in adjusted "inventory per market share point." Toyota carries fewer days of inventory than their competitors, clearly.

Posted by Mark Graban on November 4, 2007 | Comments (0)