Our GSM Frank Kelley was interviewed by King 5 yesterday regarding the change in the Pre-owed market

See the video and article here: King5 News

by OWEN LEI / KING 5 News

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Posted on April 21, 2011 at 7:12 PM

BELLEVUE --   Several local Japanese car dealerships have embarked on what they consider their most aggressive buyback campaign ever, hoping to stockpile used car inventory in anticipation of a new car shortage this summer.

In some cases, they're not even asking for a trade-in, said Sam Louie, who received a letter a few days ago from his dealership.

"I was surprised," he said. "I called them and said, 'Do you really want my '03 Acura?' It's kind of old right? And they said, 'Yeah, actually we do.'"

The promotional campaign is happening at several local dealerships selling Hondas, Acuras, and Toyotas, according to staff.

It's not just by direct mail. Some are keeping track of cars in good condition that stop in their service departments.

"Oh yeah, it's a lot more aggressive," said Frank Kelley, general sales manager at Acura of Bellevue. " We never really went after used cars, they just came."

Several dealership say they're anticipating a drop in car inventory that could start as early as May, and last as long as six months.  Kelley said the economy is partly to blame, with the situation compounded by the earthquake and tsunami that hit Japan.

"Most people trade out of their cars after two to three years, and two to three years ago no one was buying new vehicles, so there's a real shortage of used vehicles," he said, estimating a 30 percent drop in used car inventory.

And with Japanese factories running at half capacity, and American and Canadian factories running below full capacity because of missing parts, they expect this summer new car inventories could drop by 50 percent.

Which is why they're looking to get their hands on whatever they can find, including Sam Louie's.

"I think with the right price I'd be willing to downgrade," said Louie.

Dealers also expressed concerns the coming shortage will make manufacturers hesitant to pay for promotions like low- or no-interest deals, which normally keep cars selling in slow periods.

Categories: Pre-Owned Inventory, News


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