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Chrysler's new problem is a shortage of vehicles

Wed, 05 Aug 2009

A two-month factory shutdown and the cash-for-clunkers government rebates accomplished a feat that had eluded Chrysler Group: It turned several slow-selling vehicles into scarce commodities.

At the end of July, Chrysler had only a seven days' supply of Jeep Patriots, or 2,200 units, in dealer stocks. Sixty days is considered normal. Other recent slow sellers were also depleted, according to Chrysler's figures:

-- Jeep Compass, 15 days or 1,597 units at the end of July.

-- Chrysler Sebring sedan, 26 days or 1,764 units.

-- PT Cruiser, 28 days or 4,412 units.

-- Dodge Avenger, 15 days or 3,278 units

-- Dodge Caliber, 17 days or 5,237 units.

That's radically different from early this year, when dealers were drowning in cars.

For example, according to the Automotive News Data Center, Chrysler had a 221-day supply of the Patriot (18,000 units) and 243 days of the Caliber (22,400 units) as of Feb. 1 this year.

Chrysler spokeswoman Kathy Graham said the company is not concerned about a shortage.

"The plant has been running for a little more than a week," she said. "Things are starting to ship and move. We are building orders. We think it's manageable."

At the end of January, Chrysler had a 151-day supply of all vehicles vs. 40 days at the end of July.

On July 22, Chrysler amplified cash for clunkers by matching the government's offer of up to $4,500 for most of its vehicles, regardless of whether customers had a qualifying clunker. Chrysler tweaked that offer Monday by lowering the incentive on some of the scarcer vehicles.

Graham said the lower inventories are part of Chrysler's post-bankruptcy plan.

She said, "We're going to build from customer orders and dealer orders, not building just for the sake of building."

By Bradford Wernle- Automotive News