If you want further proof that the auto industry is bouncing back, look no further than the empty lots and forecourts of your local dealership. According to a story by The Wall Street Journal, continued high demand for mainstream cars is overtaxing automakers' ability to produce enough models. Several dealers interviewed for the story are reporting two-week supplies as opposed to the typical two-month allocations.

With sales expected to hit 1.4 million units when August numbers arrive shortly and incentive spending down to its lowest amount since January, these limited supplies are pushing prices even higher. For example, according to the WSJ, the average price of a Ford Fusion is up past $26,000. Unfortunately, it's difficult for manufacturers to increase production quickly. If it invests in its facilities, as many manufacturers have done, it risks wasting cash if growth suddenly slows. At the same time, the momentum gained over the past several years could be short lived if vehicle supplies continue to dwindle. "Manufacturers are in a precarious situation," notes Karl Brauer, a senior director at Kelley Blue Book.

Low interest rates and a wealth of desirable features are also allowing customers to purchase more expensive vehicles while justifying their higher overall price tags, a situation that is compounding supply shortages. Even now, during the annual end-of-summer clearance season, deals on new vehicles are remarkably difficult to come by. According to the report, the Toyota Corolla is in a self-inflicted state of shortage, as Toyota clears out inventory in anticipation of the new 2014 generation arriving in dealers. Ford's supplies should rebound as Fusion production comes on line at its Flat Rock, Michigan factory. The Chevrolet Impala, Honda Odyssey, Civic, and Accord and Subaru Forester are also facing shortages.


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    • 1 Second Ago
  • 32 Comments
      BipDBo
      • 1 Year Ago
      The manufacturers really don't mind the shortage. When the shortage is industry spread, they don't have to have as many clearance sales to make room for the next model. Average purchase price goes up and so does profit. This makes an even bigger impact on highly mass produced models where there is a lot of competition and profit margins are very thin. The manufacturers, therefore, have as much urgency to increase production during a shortage as OPEC.
      sp33dklz
      • 1 Year Ago
      It's an economic bubble of 6-7 year car loans and extremely low interest rates. It won't last.
      Bassracerx
      • 1 Year Ago
      Im selfishly hopeing this is a trend flood of new car sales increases used car prices in the short term but will lower them drastically in the long term
        clquake
        • 1 Year Ago
        @Bassracerx
        How does that work? How does new car sales increase used car prices? If there's a flood (opposite of a shortage) of new cars, the prices of new cars would come down. People would by more new cars instead of used. Used cars would lose value because new cars prices would be lower to start. Also if the demand for used cars go down and the supply stays high, prices also go down. Long term (5+ yrs) really depends on the individual vehicle and how well it was maintained and its reputation of reliability as well as cost to maintain.
      Mat Brault
      • 1 Year Ago
      Same here in Montreal, Canada. I'm looking for a Ford Fiesta ST and can't find any. I've looked with 7 Ford dealers and nobody can't find any, even though we see billboards on the side of the roads with Fiesta 2014 ads.
        John
        • 1 Year Ago
        @Mat Brault
        The earliest they're expected to arrive is this month.
      carlotta
      • 1 Year Ago
      Fusion is a distant fourth place, even with all the fleet sales.
        Dean Hammond
        • 1 Year Ago
        @carlotta
        funny Carlotta, why does every article turn into your classic ford love fest....?....jealousy is a funny thing when a company becomes sucessful isnt it...
      wrestleprocbt
      • 1 Year Ago
      Glad to hear the American car companies are doing well. They should thank Americans by either A: giving us some good deals on some cars for saving their butts and their union jobs and not jackin up prices on the cars or B: pay back what you borrowed!
      Merc1
      • 1 Year Ago
      Where do they get this stuff from? Dealers here have plenty of cars to choose from Rows and rows of them. Where is this shortage at? It surely isn't in the Dallas and Houston areas. M
        ferps
        • 1 Year Ago
        @Merc1
        Those "rows and rows" may look large, but chances are that each car isn't spending much time on a lot. They are quickly replaced with new ones.
        Dean Hammond
        • 1 Year Ago
        @Merc1
        not here in So Cal......ironically one of the biggest markets....
          Dean Hammond
          • 1 Year Ago
          @Dean Hammond
          WMB... correct, Ford told us 2 years ago we would NEVER be overstocked again, production is said to be 30% lower overall, benefits have been higher ATPs from the dealer standpoit, and lower rebates from fords standpoint.....
          • 1 Year Ago
          @Dean Hammond
          [blocked]
          wrestleprocbt
          • 1 Year Ago
          @Dean Hammond
          I'm not sure how there would be a shortage in California of Ford or GM. I didn't think Californians bought American cars? Isn't it the state with the fewest American dealerships per capita in the country?
      daewootech
      • 1 Year Ago
      Sounds more convienet than anything. "Oh darn, were low on stock kid, you better buy now at this inflated price, what's that? A deal? Sorry were too low on stock to, make deals..."
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