Dealers Balk as Chrysler Strains to Cut Inventory [Wall Street Journal]
Summary: DaimlerChrysler AG's Chrysler Group, which recently warned it will report a loss of $1.5B for the quarter (more than double its previous forecast), is encountering difficulties from auto dealers who are not interested in taking on unordered cars. Chyrsler has approximately 50,000 cars in storage. Many dealers, including AutoNation Inc., the largest auto retailer in the U.S., are balking, despite new sales incentives intended to clear Chryslers from their lots. In addition to approaching dealers, Chrysler is also halting production temporarily at several plants. Many of the unordered cars are pickup trucks, minivans and sport utility vehicles -- cars that have suffered a drop in popularity in the wake of rising gas prices.
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Potentially impacted stocks and ETFs: DaimlerChrysler (DCX), General Motors (NYSE:GM), Ford (NYSE:F), Toyota (NYSE:TM) • Auto Dealerships: AutoNation Inc. (NYSE:AN), Group 1 Automotive Inc. (NYSE:GPI), Sonic Automotive Inc. (NYSE:SAH), United Auto Group Inc. (NYSEARCA:UAG)
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