New Dealer Problem: Too Few Cars!

Car dealers have been through a recession, and a lengthy arbitration process. Now, they are facing a new problem, a shortage of vehicles.

"We have a lot of business," says Russ Shelton, who owns Shelton Buick GMC in Rochester Hills, MI. "We have a lot of people walking through the door, and they want to buy. We want to be able to show them what we have, and make it happen."

The major auto companies have kept a close eye on production, making sure their inventories are in good shape. That means they need fewer incentives to sell a car, and make money on each vehicle they sell.

But for dealers, it means fewer vehicles on the lots, at a time when car buyers may be looking for something specific, and not finding it.

"They've waited a couple of years now to buy a vehicle," says Shelton, who has a lot of customers are coming off of leases. "They need to buy a vehicle."

The issue was first reported by Automotive News, which surveyed 244 dealers and found that 73 per cent felt they had too few vehicles in inventory.

The auto companies are working to adjust production. General Motors, for example is trying to build more Chevy Equinox and GMC Acadia crossovers. But they also want to make sure they don't flood the market.

That happened a couple of years ago, and dealers like Shelton still remember having too many vehicles on the lot, which required deep discounts to sell.

"At some point, we had too many cars and not enough customers," said Shelton. "Now we have too many customers and not enough cars. It makes it difficult."