AutoNation CEO - Ford Unsold Inventory 105 Days, Not 75; D/C Totals 126 Days, Not 82

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The nation's largest dealer of new cars and trucks said Thursday it is struggling to sell many more domestic vehicles than industry reports about swelling inventories would suggest -- and the problem must be dealt with soon. "The challenge that we have is even greater than people are talking about," Mike Jackson, chief executive officer of Florida-based AutoNation Inc., told the Free Press in an interview. "It's weighing on every retailer."

AutoNation is a crucial cog in the U.S. auto industry, with 80 General Motors Corp., 48 Ford Motor Co. and 58 Chrysler Group dealerships nationwide, in addition to 147 other auto franchises. Jackson's remarks came after AutoNation reported that its profits sank 37% in the past three months, to $81.8 million -- giving a glimpse into how Detroit automakers' falling sales are affecting dealers. Jackson said GM, Ford and Chrysler need an aggressive combination of incentives and production cuts soon to deal with the inventory glut. Otherwise, he said he feared dealerships across the country would be selling 2006 vehicles well into 2007.

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Chrysler spokesman Kevin McCormick said the company was comfortable with the current method of reporting and calculating supply. "It reflects sales to all of our customers," he said. "It's a recognized industry way of reporting." But Jackson gave his own calculation as to how many days of supply Detroit's automakers are carrying at retail, to show that the automakers have many more months' worth of vehicles than needed.

"Nationally, GM retail inventory is 94 days, not 76," he said. "Nationally, Ford retail inventory is 105 days, not 75 days. And finally, national Chrysler retail inventory is 126 days, not 82 days." More than anything else, Jackson's assertion may show that the old automotive standard of "60 days supply" may be going out the window.

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http://www.freep.com/apps/pbcs.dll/article?AID=/20061027/BUSINESS01/610270304/1014