Auto inventories on the rise

General Motors Co. reported its inventory of unsold cars had reached 95 days, a jump from 75 days of inventory in August, The Detroit News reported Wednesday.

Ford's inventory has reached 71 days, near the industry's historic average but higher than the optimal number, Citi Investment Research and Analysis researcher Itay Michaeli wrote in a recent research note.

Chrysler Group LLC reported an inventory of 79 days at the end of November, the newspaper said.

Michaeli's recommendation is for the automakers to have 60 days of inventory at the end of the year to keep the companies "poised for a typical seasonal slowdown."
Sixty days at year's end is the "norm" he said.

GM general manager of dealer networks Jim Bunnell said, "We don't want to leave anything on the table. We don't want to be short," in explaining the high inventory.

Ford spokeswoman Anne Marie Gattari said a number of trucks are "parked in various lots, and they are shipping now," adding "a small number" of 2011 F-150 trucks were sitting in dealership lots waiting for a new part.

Brisk sales would pull inventories in the right direction. Persistently high inventories, meanwhile, are likely to give investors a cause for concern.

Retired GM executive Warren Browne said if GM's hopes for high sales in December do not materialize, "then Wall Street will punish them in January."

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