What happens to unsold cars?

Frits Pieper
23 October 2019

Have you ever wondered what happens to unsold new cars? Car manufacturers not only anticipate expected sales with their production, but also deliberately produce more cars than necessary to mask the decline in demand. As a result, the sales channel is almost clogged with new vehicles and dealers worldwide are stuck with thousands of unsold cars. 

Global car sales is down about half a percentIn absolute numbers, that amounts to a drop in sales of 430.000 cars. But even when car sales were on the rise for years, more were produced than sold. All those unsold cars are now languishing in the thousands on abandoned lots all over the world, waiting for a buyer who will probably never come.

Just type 'Dundalk, Maryland' (USA) into Google Maps, and then zoom in on the gray area to the southwest. No, this is not a parking lot or a scrap yard. And there are many such huge parking lots, old airports or old industrial estates full of new cars on this earth.

Sell ​​at a discount?

For car dealers, it is not an option to sell these cars at a big discount, as that would be at the expense of selling newer models. To be honest, I would be pretty angry if I heard that my neighbor bought the same new car as me, but for half the price.

Car manufacturers and dealers are silent on what happens to the excess production, so we can only hope that it is recycled somehow.

Devil's dilemma

For car manufacturers, temporarily scaling back production is not an option, because that would be at the expense of employment. Factories would have to be closed and thousands of employees would lose their jobs. This would have catastrophic consequences for suppliers of car manufacturers, such as steel producers. Moreover, shutting down a production line usually costs more than continuing production, even if it does create excess stock. The car industry and its chain partners are therefore in a devil's dilemma.

No end in sight for the time being

There is no real solution to this problem. New vehicles keep rolling off the production line and stocks are only piling up. A typical first-world problem, we might say. Although it goes against all economic logic to produce more cars than can be sold, the end of this problem is not yet in sight.

Time will… Solve it?

Car sales are expected to continue to decline. Partly because cars are increasingly being banned from city centres, younger generations will look for other mobility solutions. Porsche is already anticipating this and foresees a future in which it may no longer sell cars at all. Will the problem then solve itself? Nevertheless, a lot of 'old' cars will still have to be destroyed or recycled.

3 comments

  1. Bholai on October 30, 2020 at 17:37 PM

    I am looking for an affordable car

  2. Kees Hendriks on July 25, 2022 at 10:26 PM

    If so, why is leasing so expensive?

    • Frits Pieper on July 27, 2022 at 20:23 PM

      This is an article with outdated information. I don't know if it is still valid.

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