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This link came in an email that was getting passed around the office today:

http://www.vincelewis.net/unsoldcars.html

The premise is that car manufacturers, not wanting to dilute their inventory to a point that would push supply up and price down, are parking their inventory in massive lots where they'll sit for an indefinite amount of time.

While the site doesn't exactly present the information in a convincing fashion, the photographs are intriguing. It seems that the cars parked near a port are probably waiting to be loaded onto a ship for export, but the photos of cars parked at inland locations are puzzling and for these it's more difficult to create an alternative explanation.

Why would car manufacturers not scale down production if indeed their inventory is getting sent to some auto purgatory far away, never to be sold? It seems prohibitively expensive to keep manufacturing inventory that won't bring in future revenue.

What's going on in these photos?

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That was addressed by Snopes. –  scozy May 20 at 19:55
    
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Also refuted by Matt Hardigree at Jalopnik (his 2009 article on unsold cars appears to be the source for some of Vince Lewis' article). –  Gordon Davisson May 29 at 16:42

2 Answers 2

up vote 18 down vote accepted

Are there lots full of unsold cars? Yes

Are those cars being left to ruin? Almost certainly not.

Here is a much more reliable story about lots full of unsold cars, from Business Insider. However you should notice an important thing: it's from 2009 - when the most recent recession was just getting started, and car sales were plummetting.

The next thing to notice is that most of the pictures are of working ports. Ports generally have lots of cars parked around them at the best of times, because of the way they work. A ship shows up, and all the cars are unloaded (often thousands of them). Then the cars are dispersed gradually to dealers served by the port. A thousand cars certainly isn't of itself a sign that there is a surplus of cars. It may just mean a ship recently arrived.

The Business Insider article points to the stockpile growing (because of the recession), and notes that some places are being used to park unsold cars that wouldn't usually be - test tracks for example. However it also contains a description of how the problem is fixed. Car manufacturers import fewer cars, and ultimately manufacture fewer (and lay off workers or close factories). But doing this takes time, and can be damaging if the surplus turns out to be short lived. There is nothing there to indicate that cars are being trashed, or deliberately left to ruin.

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The only notable exception to this that I can think of is after natural disasters involving widespread flooding - flood damaged cars are very difficult to sell, and, for example, after Hurricane Sandy, tens of thousands of cars did indeed sit in lots around the region before being auctioned off as little more than scrap or parts. –  LessPop_MoreFizz May 17 at 2:15

I spent several years auditing physical stocks in a mayor global vehicles manufacturer in Europe. When the credit crunch hit in early ´08 the first step they took was to literally force the dealers to buy huge amounts of new vehicles until the sales network couldn´t take it anymore. By 2010, lots and long-term parking facilities were crowded with unsold cars, many of them displaying manufacturing dates well over two years back.

The key point is this; plants need to produce vehicles in amounts over the threshold of profitability and this mainly depends on the marginal costs of production or, in other words, they need to produce a mininum of units or close the plant to avoid massive losses. Ports crowded with brand-new cars are usually close to manufacturing facilities. But that doesn´t mean those cars await shipment. Ports are used by automakers as temporary storage facilities too, though they are usually transfered to cheaper locations in a short time. In any case, it only adds up to the losses delivering cars to crowded markets to be piled up in a shithole (literally, it´s hard to believe the places they get to use)

When the SHTF event is close, makers usually go mad with "forced" export operations. They do this using the dealer network and cars are really transfered to a different country but not really sold. The buyers are qualified "brokers" buying large amounts of cars under undisclosed (even internally) conditions and repurchase agreements in case they´re not sold in a given time.

So, to sum it all up, yes. These are mainly unsold cars piling up, I´ve seen all of this before recently by myself. History repeating.

Regards

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This post does not cite any references or sources. Please help improve this post by adding citations to reliable sources. Unsourced material may be challenged and removed.

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Welcome to Skeptics! Please provide some references to support your claims. Unfortunately, personal experience isn't sufficient for answers. –  Andrew Grimm May 18 at 2:40
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There might be a kernel of truth here, but you need to show it with references to something other than your experience. –  matt_black May 18 at 16:07

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