Hidden Unsold New Cars and Capitalist Overproduction
Overaccumulation is a particular crisis of capitalism. Are these grave yards of brand new cars a symptom of it?
Source:
Where the World's Unsold Cars Go To Die, Zero Hedge
Another Month, Another GM Channel Stuffing Record, Zero Hedge
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The problem is car last longer these days and people tend to buy one and keep it a lot longer if it fulfills their every need. If there were more incentives to change them every 3 years then I’m sure people would do it but mostly it’s companies that di this and private buyers tend to buy a 12 month old car and save a packet over new.
I was told 21 years ago by two German Engineers that this practice was adopted by Car manufactures, against each other’s ability to stay in the game or sink. Now we see where that business model ends up.
The price of these new vehicles are absolutely appalling!
It looks like they are loosing money anyway by producing so much that they aren’t selling. Either stop overproducing, or lower the cost. Truth be told, if they lowered the cost, and everyone else started trying to lower cost, maybe we could fight the effects of inflation, because obviously they have the means to produce. One would think the law of supply and demand comes into effect here.
I always wondered what the car manufactures did with new cars that were never sold.
They sell them at cost or loss.
Donald Thomas They sell what they can then the overs are sold the next year as unsold new stock at a reduction in price they make there back and then some.
Keep wondering. This isn’t it.
Donald Thomas :they go to auction
+Patti Morris; actually many unions were formed after slavery ended. So many freedmen competing for jobs drove people to unionize so only whites would be hired. It was similar to jim crow. Socialist yeah, but more like national socialist.
Looks like distribution centres to me, just like the one in Southampton (UK). In port cities a car transporter ship can take up to 5000 cars, that a whole multi storey car park filled with cars gone in one day! Now, imagine how long it takes to transport 5000 cars to a port from a factory, considering that on average 6 cars fit on the transporter lorry?
This is a “Thesis” I have written on in the past: Money is a commodity with a mutually agreed upon value, and it is not real.
So how can the hardships resulting from poverty be justified? “Money” is a total failure because so many individuals have want and need, suffering from loss and want.
Western Nations are easily capable of producing massive amounts of most goods, well beyond what they can sell. This is where the Marketing people have to work closely with the Production Management to produce the “right” amount of each product. Same as Agriculture. Just because you CAN produce another million bushels of Corn doesn’t mean you “should” produce those bushels. Glut causes losses, Overproduction causes revenue losses just the same and is almost synonymous with “glut”. ALL business is this way. BTW; New Car sales were the highest they’ve ever been in 2015/2016. Had we built the 2015 number of New Cars in 2009 we would have to crush them or let them rot in a field. Business 101… Capitalism is not perfect but is far better than any “planned economy” the Communists ever dreamed up. Capitalism/Libertarianism works just fine, flaws and all.
The truth is somewhere in between. In Ventura, CA there are tons of Korean cars that nobody wants to buy sitting around collecting dust. Camarillo Airport, Oxnard Airport, the side of the Santa Clara river bottom. The official story being staging areas for the cars to be shipped is partially true but there are so many cars just sitting around on lots these days because the economy isn’t moving like it use to.
The Market is being blind to a very basic RULE of Economics and that is called the LAW OF DIMINISHING RETURNS. It is set in stone and companies need to pay attention to it. They are over pricing themselves into oblivion. I was in the Car Business for 26 years at the dealership level, and have been through numerous downturns. When production exceeded the sales market, the plants would go on hiatus.
The free market corrects itself. Too much supply and little demand? That doesn’t help the auto manufactures, in fact it hurts their bottom line as they have to discount them to get rid of them. Got a sweet deal on a Toyota last year that was on sale plus a $2,500 rebate for paying cash. I couldn’t even find a decent used one for that much less and now I have a new car that should last me at least 15+ years. Yea I’m cheap.
Fabulous presentation . Eye opening and thought provoking. . Thank you !
At some point The U.S Govt. Should step in and find ways to make it illegal to over produce. This isnt food where it expires shortly after being sold or clothes being reused or disposed. We are talking about fully equiped cars from plastic to sheet metal sitting on payed property hidden. Something Ben Shapiro should tackle and be talked about.
Nothing is perfect. So, what if you over produce at work? Send you home? Send you to jail? Do you even know what you are advocating?
@Kjraider2009 Well you sure love to overpay for a car that is made for less than $7000 tops for a large V8 muscle car
There’s so many cars out on the road that are falling apart. The problem is these car companies are wasting money on land and unsold cars. Yeah so they’re losing money by keeping the older cars on the lot to sell for cheaper. But these idiot car companies are losing more money by trying to remove the problem. Who buys a new car these days anyway, with all the haggling and the price gouging they do i’d rather go buy a used car from Carmax. In fact these car companies are not even stripping these unused cars for new ones. Manufacture cars that end up in a lot somewhere unused. It’s a terrible waste and it’s a poor business practice when you could have gained more money out of something if you didn’t ship unsold cars to a landfill they’re paying for that isn’t exactly making them any money.
Car thieves, you should be having a field day with this, free cars and i don’t think they even bother putting cameras up because who cares about cars being left in a lot to die.
This has been going on for years. I used to be a Austin Rover Salesman back in the late 80’s and a delivery driver told us that he had spent the whole of the last week, transporting Brand New cars to a breakers to be Crushed because they could not sell them. He added that the drivers were Warned not to talk about it or they would be Fired.
Jason, would be cool if you updated this video in light of the big 3 auto makers decision to stop selling sedans.
How do you know about these lots of new vehicles?
I don’t doubt it—always wondered what they do with all the NEW vehicles not sold. How did you find the secret?
It amazes me how an American made car or truck can cost $80,000.00. It’s ridiculous that every year car prices soar.
Thomas Heil Yep….. I’m out. I can Uber for the rest of my life and pay less than that.
Faruk Carushi but prices rise on uber fairs. So you might barely break even if you took an uber at current fairs for the rest of your life but uber prices rise a car is like a mortgage. It’s a flat rate or if you paid the car off its almost free. Also cars can cost as low as $10000 in the U.S.
@Lucas Fernandez you forget taxes on driving the car, the ever increasing price of oil and more, and then after say 10 years at best the car is gonna start needing repairing somewhat often and after another 10 years the car will be practically scrap metal on wheels, needing to get another one for say 30.000 dollars if you want something decent. It’s just not worth, taking ubers and buses may be unreliable sometimes, but finantially (and ecologically) is the best option