Why are dealer inventories so low when Jeep can still build and deliver them so fast?

[summer4x]

Seems odd to me. All of these people are ordering and receiving their Wranglers in what seems to be really fast turnaround times, yet dealer inventories are seemingly the lowest ever. Why wouldn't dealers be stacking their lots?

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[The Last Cowboy]

Because they are selling like hotcakes. Drove by a Jeep dealer today. All they had left were about 5 Gladiators. Doesn't matter what the dealers order, they sell.

 

[sentience]

Because it actually benefits them. Demand for cars hadn’t suddenly changed - the tightened supply of cars means higher sale prices.

Since cars are being sold practically off the flatbed, there isn’t any incentive for dealer inventory to build up. Every vehicle sitting on the lot was purchased by the dealer from the manufacturer. Less inventory means less money tied up on cars sitting on lots. The longer a car sits, the more the dealer needs to discount it to move it.

Factory orders are even better, since there’s almost no risk to the dealer. That car spends almost no time on the lot, to (most likely) a buyer already firmly committed on buying it.

 

[summer4x]

Dealers lose sales when they don't have inventory on their lots. That's a fact.

 

[Sargeoverland]

The manufacturers are actually working on a plan to ship the cars from port to dealerships with out the chips in them to 1 clear out the ports for more cars and 2 to fill the dealerships back up. They would then just half to wait for the chips to come in and install on sight. Once this happens the used car market will drop back down. Same time the 11.5 million behind on rent goes boom is the same time all the car sales are going to do the same

 

[displayname]

Allotments are still down. I'm tossing out imaginary numbers here, but this should help explain.
If a dealer would normally get a 200 vehicle/ month allotment, and they would normally sell between 40-60 of those from custom orders, they'd have extra cars on the lot to move the rest.
But now dealers might only get an allotment of 50-100 cars total per month. Because customer orders are still coming in at the same rate, the dealer isn't going to use of their few allotments to gamble on a car that could just sit on the lot. So they focus on vehicles that are already sold, leaving little to no inventory for the lot. And the stuff on the lot moves quickly compared to before.

If a dealer wanted a full lot, they could refuse custom orders and use their entire allotment to fill the lot. But then they have a ton of cars just sitting and they have to convince customers that having a car *now* is better than waiting a month or two to get exactly what they want. Normally they have enough inventory to offer both options. But right now they kind of need to do one or the other. And orders are more guaranteed money coming in.

 

[Chupacabra]

Because they are selling like hotcakes. Drove by a Jeep dealer today. All they had left were about 5 Gladiators. Doesn't matter what the dealers order, they sell.

Yep, saw the same thing yesterday.. Drove by the dealer I got my Wrangler at, none on the lot and maybe half dozen Gladiators. The lot was mostly empty.

 

[FloridaLarry]

Dealers lose sales when they don't have inventory on their lots. That's a fact.

Not if other dealers also have no inventory.

 

[LuvHydro]

I'm not sure if other manufacturers are taking/shipping factory orders like Jeep is. I know all the local lots, especially Ford, are bare.

I can tell you our local Jeep dealers have lately had between 0 and 2 Wranglers each. Over the past 2 months, as soon as one comes in, it is gone within a week.

The factory order is a dream for everyone involved. The factory builds a unit that is already sold, the dealer makes bank, around here they are selling for MSRP, which means they are also keeping the floorplan assistance, hold back and advertising assistance, which sauve buyers would mostly negotiate off after we beat them down below invoice.

For me, it was a no brainer to custom order as my need was not immediate, I got exactly the unit I want at a price, that as far as I could find, is unmatched (Gupton 7 below)

The larger issue for me is I wanted a stripper. Virtually every JLU Wrangler the locals have had for the past 2 years I've been looking have MSRPed in the mid 50s and up with a bunch of ripoff options I don't want or need. My JLU has everything I need and cost a tad over 30K. I'll spend another $700 or so making it my own.

The only downsides I can see are not being able to inspect the vehicle beforehand and the wait..... ohhhh, the wait.

 

[dgoodhue]

Wrangler sales were at all time high for last quarter (2nd). Jeep is building them as fast as they can, but they are still selling them quickly. I am sure sure dealers would love more inventory if it was available.

 

[Walker Texas Wrangler]

In addition to the above comments about selling well, custom orders and dwindling allotments and custom orders, we're coming close to the end of the model year. Pretty smart move to try to avoid having '21s on the lot when the '22s are so close to the horizon. Soon people will just want to wait for a '22 or they will sell at a bigger discount to get the last of the '21s off the lot. Pretty smart move to focus on taking orders. But I'm sure the salespeople aren't so thrilled to not have inventory.

 

[Trainman]

The manufacturers are actually working on a plan to ship the cars from port to dealerships with out the chips in them to 1 clear out the ports for more cars and 2 to fill the dealerships back up. They would then just half to wait for the chips to come in and install on sight. Once this happens the used car market will drop back down. Same time the 11.5 million behind on rent goes boom is the same time all the car sales are going to do the same

This is Ford, not Jeep

 

[Trainman]

Since sold orders are getting the most priority at this time and it's filling most of the slots on the assembly line, where would you like the plant to manufacture all the extra vehicles to fill dealer lots, out on the back lot with migrant works.

 

[Killed by Death]

Since sold orders are getting the most priority at this time and it's filling most of the slots on the assembly line.

This...most dealership allocations are going toward sold orders. Plus there is still this thing called Covid causing numerous supply chain problems.

 

[galleywinter]

It's worked out great for me. I got paid way way too much for my truck on Vroom and ordered the exact Jeep I wanted for way below invoice. Like a commenter said above, the wait is the hardest part. Worth it. What does that have to do with the OP's question. Custom orders are "Sold Orders". They take priority. Yes, Jeep needs to keep their dealers happy but they all get allotments. When it gets close to the end of the model year, those allotments run out. You'll see the lots fill up when the MY 22 hits. It's not a chip thing or a parts thing. They're cranking them out as fast as they can in Toledo. Before I ordered mine (2nd JL) I tried to buy off the lot. I asked the age old question, "Shoot me your bottom dollar the first time". They said, "What's it listed at". Really? If they had taken $1,000 off I would have bought. The in-laws just bought a new Subaru SUV. No negotiating, the price is the price. They hadn't bought a new car in 20+ years. What do you mean you won't come off the price. That's where we are at right now. Again....It's great of you need to sell your rig before ordering your Jeep. High price for your rig and below invoice on your Jeep order. Win win. Other than the wait, I'm not sure why anyone would buy a Wrangler off the lot.

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