The auto industry continues to go through convolutions trying to figure out what’s the right way to run the business. Now we get this provocative suggestion from Mike Jackson, CEO of AutoNation, the US biggest chain of dealers: Auto makers should target dealer inventory level of 30 days of supply as opposed to the 60 days that has long been the standard. (Jackson calls for lower inventory standards, Automotive News, Oct 8, 2009)
“It has been the mantra for 50 years,” Jackson said today in an address at Nova Southeastern University in Fort Lauderdale, Fla. “What other business accepts the same benchmark for 50, 60 years and says, ‘That’s fine.’”
It’s an interesting proposition but one wonders whether it is in fact feasible. Indeed, if you look at readers’ comments on the Automotive News site, it is clear that some think this could work for a large AutoNation dealership but would be awfully hard to pull off for smaller dealership. The alternative would seem to be to dramatically cut the breadth of offerings of car makers.