For the past year or more, auto companies, GM in particular, have claimed that they are selling cars as fast as they can make them. This however is far from the truth as the following reports prove. GM and other auto companies have not slowed down their production but their sales have crashed. To maintain the illusion of Recovery in the auto sector, GM reports a vehicle sold as soon as it leaves the manufacturing plant. However millions of these cars sit in showrooms, and on dealer lots gathering dust since tapped out consumers have no capacity to buy these vehicles. In the end they are sold off below cost incurring heavy losses for GM and other auto manufacturers. Eventually these auto companies will come with their begging bowls out once again looking for handouts from the Government, read from taxpayers. Corporate earnings reports are based more on creative accounting than on sound business. Factual losses will overtake fictional profits sooner rather than later with even more devastating consequences for the Global Economy than in 2008.
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- · China's Auto Dealers' "Backs Are Broken" As 'Channel-Stuffing' Gets "Dangerous" | ZeroHedge
- · Growing stocks of unsold cars around the world / Guardian UK Carmakers around the world are cutting production as inventories build up to unprecedented levels. Storage areas and docksides are now packed with vast expanses of unsold cars as demand slumps
- · Inventory building up at Chinese car dealers, Bloomberg says
- · As The Chinese Car "Channel Stuffing" Bubble Pops, "Debilitating Price Cuts" Arrive The fact that GM's "stunning" car sales have been in no small part driven exclusively by its eagerness to stuff dealers with unsold inventory, aka channel stuffing, is well known to Zero Hedge readers - we have been covering the subject for over a year no.....»»
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