Dealers see glut of gas-guzzling SUVs

AutoNation re-examines the value of its used cars, including SUVs, in 15-day periods, Maroone said. After sitting unsold for 60 days, the cars are eventually sold at wholesale auctions to other dealers.

“It’s a very good way in that it provides you liquidity when you’ve been unable to retail something, or the vehicle doesn’t meet your standards to retail it,” Maroone said. “It moves at auction. It’s always just a matter of how much.”

SUVs shipped overseas
Another option to reduce inventory is to sell the SUVs overseas. At AutoNation’s Maroone Nissan of Pembroke Pines, southwest of Fort Lauderdale, used car sales manager Julio Cardoso noted that he has three SUVs headed to Russia this month.

Sales manager Al Johnson said the dealership had been exporting about one car a month — this year they average roughly 10. AutoNation said nationally its overseas shipments were up slightly, but not in double digits. It did not disclose specific figures.

Maroone said he has been active in exporting cars to Central and South America since the 1970s, while the weak dollar has seen more luxury used vehicles being shipped to Europe recently.

“We’re willing to ship anywhere as long as the car is paid for before it leaves the lot,” Maroone said.

A March 18 report by Wachovia Capital Markets analyst Richard Kwas noted that about 75 percent of about 40 auto dealers and managers surveyed said they are selling more cars and CUVs than expected.

“We suspect traditional SUVs are being traded for new CUVs, which likely will drive further declines in wholesale prices for the SUV segment,” the report said.

As more SUVs are being traded in, dealers have to work hard to manage inventory to prevent a glut.

Dealers “always have a decision to make and that is, ‘Do I lower my price enough to move the vehicle off my lot today, or do I hold on to the vehicle another month and hope that someone comes in willing to pay enough money?’ ” Denove said.

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