Unsold foreign cars piling up at U.S. ports

It's not just an American problem. Auto sales worldwide have plummeted, and the result is thousands of new foreign cars piling up in our nation's seaports because auto dealerships are refusing delivery.

It's rapidly becoming the world's largest parking lot.

Is it the Cross Bronx Expressway at 6 p.m.? No, it's the Long Beach, California port, which along with the Los Angeles port is rapidly becoming a defacto storage lot, The New York Times reported, as thousands of unwanted, new foreign cars pile up, their future unknown.

The reason? Foreign new car sales have plunged as consumers cut back spending amid the caution-inducing U.S. recession and unemployment levels rise, which historically has led to a decline in new car sales. New car dealers order cars months in advance but have the authority to reject delivery if demand declines.

Further, if you thought only U.S. automakers General Motors (NYSE: GM), Ford (NYSE: F) and Chrysler had lots and storage fields of unsold new cars, you're mistaken, so says economist Peter Dawson.

"This recession is an equal-opportunity pain inflicter for auto manufacturers, and it's hitting foreign car manufacturers as well," Dawson said. "Toyota (NYSE: TM), Nissan, even Mercedes-Benz are seeing their inventories build, despite promotions and sales incentives."

The typical car supply on hand per manufacturer is now four months, compared to two months, a year ago The Times reported. Dawson says he knows why.

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The silver lining is that this is a good time to get a great deal - if you have the money!

So we might be able to get some cheap cars out of this.
See if you can buy them from the manufacturer off the docks.

The auto industry is highly cyclical.

Top Gear (motoring program in the UK) revealed last week that a 2007 Mercedes CLS 63 AMG, 30000 miles, originally cost £100,000 is now being sold second hand for £16,000!

84% depreciation... eyewatering.

Normal manufacturers would simply lay off excess workers. The big 3 run into problems because of the unions insisting on fuller staffing even in downturns.
Im sure Toyota will come out unscathed due to its efficiency; Nissan, Renault and Seat will all also do OK thanks to their genius CEO Carlos Ghosn; Tata will probably emerge as a global contender now that they have the low segments in the emerging markets and the high end luxury marques of Jaguar/ Land Rover.

Not so sure how well the big 3 US makers will come out of this. I think only Ford will survive, that too in a diminished form. Inefficiency will kill the US makers; the global players will probably survive relatively unharmed in the long term.

YAY! Maybe now I can afford that shiny new BMW! Are the dealers actually going to significantly reduce price?

I do not think any auto company will come out of this with out huge losses!
Even if you wanted to buy a car most will not be able to get it financed , and very few of us have the cash to go and buy an auto.

Oh sure there are a few, but that will not even make dent in what is out for sale now.
I can for see large amounts of people losing there jobs from the loss of the auto company's . And that is bad. Just look around the world now . So many have been laid off now it will take years to get everyone back to worth.

I'd be interested in seeing if the foreign auto industry starts cutting back on production due to larger inventories on hand in the USA.

Building up inventory is just a means to keep people employed, no products are being sold, but people still make them.

Kinda like a huge economic circle.

If we are about to get hit with a New New Deal I wouldnt count on getting any inexpensive cars regardless of the glut. During the New Deal the government torched surplus crops to artificially control costs. I would expect Obama and the feds to dump the vehicles in the ocean before allowing prices to fall. After all an inexpensive car means you might be able to purchase it without taking on debt, gasp!!!

Look at housing. Home prices are still floating on an artificial high despite how much they've come down and the government will be damned if they let the market actually correct itself. They have to meddle to artificially force the prices to remain higher than they realistically are to save face with the fake economy they've propped up.

reply to post by Interestinggg


I would be very interested in puchasing one of those new M. B. in Los Angeles dock. Please let me knoww who I can contact. Thanks

reply to post by thisguyrighthere


I gotta agree with you there. A population without debt can pretty much do whatever they want. If we were able to buy an $8,000 new car, just think... How many more guns we could buy

But seriously... As one who works in the car biz, it's depressing. The banks have now gone to 84 month loan stretching the already long 72 month loan. That gives NO INCENTIVE for the auto companies to create a lower priced car.

Originally posted by Raustin
YAY! Maybe now I can afford that shiny new BMW! Are the dealers actually going to significantly reduce price?

Definitely, new and especially second hand Audi's and Bmw's are after collapsing in price. Its a good time to buy an Audi Rs4 or Bmw 5 series, you'd probably sell it for a similar price in 4 years when everything is back to normal.

Yes I haven't been down to the harbor area but I did see on the news they are running out of space at the docks even,hmm maybe I can get a deal on a new BMW roadster after all,wonder if they will have my color of car there

I went in to a forign auto dealer here in Omaha acting like i was looking for a car. There did everything they could to keep me there. I was there for over an hour trying to decide what i wanted to buy. Even the general manager was there telling me what great deals i could get. They are desperate. Now is the time to shop.
As i was leaving they realized i wasn't going to buy and they grew angry lol. I mean yelling type of angry. So i told them ill never come back. Ever.

I have been looking to buy a car for a couple of months now.I've been to a couple of dealers and they did not seem to be in a panic.They let me leave with no problem.I was surprised.One of the salesman was going to get back to me and let me know what was in stock and had what I needed.Four weeks later he called me and asked if I was still interested,and to check my correct fax number.I sent a request for offers thru the manufacturers web sight and they gave me three dealers (in my area) and I plugged in what I was looking(options etc.).Of the three only one made an offer,though it was not for the year I was looking for.All of them virtually bombarded me with reasons why I needed to come into their office to deal with them as if I can't make an informed decision from my home.The whole way a person buys a car is aweful.The atmosher is confrontational.One place I went to is where my wife and I boght our first car.When we went back in the same guy who sold us the first car tried to tell us he only started three weeks ago and had to check with his manager.We walked out at that point laughing (we think he realized it himself).

The bottom line here is that you have a hard time feeling sorry for a lousy system .Why do peple get paid for not working.You know the execs have the same mentallity by flying in on the jets.and in typical salesman fashion up the ante. I wish them all well.

I hope these cars aren't sent back to their countries of manufacture.

Pretty soon, one man's 'mode of transport' is going to be another's '2 bed mini-apartment' with air conditioning in 4 or 5 door choices and 'all the rainwater you can drink'.

Cars arent the only thing piling up they are trying to keep peoples eyes on the wests ports because the east ports have all the FOOD on them that is rotting! It isnt that they are refusing delivery on any front the banks wont give them the papers saying they have the normal credit to pick the stuff up. It has gotten so bad Greek ships wont even leave port with out the papers before hand. The dry index on shipping everything from steel to food stuffs has plumetted by 90% since last spring. ( for those who dont know the country of Greece is the BIGGEST maritime shippers.)
Many grocers are now in trouble too, as they are being refused credit against the stock on hand they aready paid for. This practice has been going on forever and now all of the sudden it has stopped and they cant get anything delievered unless they make an agreement with the producer themselves. Not alot of people have seen it yet as most major chains have numerous warehouses that can easily fit a football feild inside. The problem is those warehouses are just now starting to run low on staples etc...its only a matter of time before people start seeing more of one product filling 3 spaces instead of 3 products filling 3 spaces. ( and yes they are getting worried I know the head manager for a couple major chains here, they are sweating, and jumping through hoops to get foods brought in from pretty much anywhere.)

Originally posted by thisguyrighthere
If we are about to get hit with a New New Deal I wouldnt count on getting any inexpensive cars regardless of the glut. During the New Deal the government torched surplus crops to artificially control costs. I would expect Obama and the feds to dump the vehicles in the ocean before allowing prices to fall. After all an inexpensive car means you might be able to purchase it without taking on debt, gasp!!!

Farmere in NW indiana had a meeting with the gooberment last week to get paid to grow nothing for 5 years. Tens of thousands of acres going out of production in this area alone.

mikell

We're not buying them, because they use gasoline, not because consumer confidence is low. If they were hydrogen-cell or H20 powered 4x4's, they'd be flying off of the shelf.

It just goes to show that very few people actually understand how the world works, and sales-people are the very last to know.