Do dealers purposely keep small inventories?

[vsd]

The other day I was driving by a Saturn dealership and decided to stop in to take an Astra for a spin, but they didn't have any in stock, and I noticed they had barely any new cars on the lot, almost all of the cars they had were used. They had about a dozen Aura's and several Vue's. Do some dealers keep small inventories on purpose and instead do more dealer trades or order specifically optioned cars from the factory? Is selling used cars more profitable? The dealer really paled in comparison to the Toyota dealer across the street which has an inventory of hundreds of new cars, including the newest models like the new Corolla and Matrix.

[F14CRAZY]

I once read that dealers make a lot more profit selling used cars than new ones

[GMCdriver]

Yes and No.

[doh]

Yes we make more money selling used.

Yes manufacturers make us take some "slow moving product" to get fast sale items.

Yes we pay about 5% interest on items on our lots, after WAP "wholesale assitance program" which pays the first 90 days basically.

So yes if you go looking for a Astra, they "the dealer" may be forced to order a for stock Savana to get. You may have trouble finding one.

But manufacture's have what is called "Turn and earn" meaning if you sell one you earn another, the problem with that is that you sell one out of stock in January, you will not see it's replacement till April

[vsd]

The other part of my question that I forgot to ask is are new products like the Astra first sent to areas where the manufacturer, in this case Saturn, feels they will sell better and the areas where they think they will sell slower get them later? I remember this dealer being loaded to the gills with Ion's a few years ago, but the salesman said that they weren't having much trouble moving them.

[GMCdriver]

GM usually ties allotment of a new model to a dealers performance on an older model.

The more 07 CTSs a dealer sold, the faster they got their allotment of 08s and they would also be able to get a larger alotment with less strings from GM.
The initial allotment of Allures (LaCross) was based on each dealers sales success with the Century the year before.
G6 allotment was based on Grand Am sales.
I don't know what GM might be useing to determine Astra allotment, perhaps Ion sales?

A dealer that tries to order very few of an out-going model because a new one is slated for release will have a hard time getting their hands on the new one for the first little while.
My dealership ordered something like 40 of the old CTS during the last build cycle just to ensure that they were top of the food chain when the new ones(08s) started arriving.