Channel Stuffing: In Pics
PEOPLE CAN’T AFFORD NEW CARS …
What is “channel stuffing?” Glad you asked … it’s a business term, and it refers to the practice of deliberately pumping excess inventory into a distribution chain in an attempt to artificially inflate sales.
We’ve written about it in the past as it relates to the automotive industry – which continues to engage in the practice. In fact earlier this month General Motors – which received billions of dollars in bailout money from U.S. taxpayers – reported record inventory of 825,805 at its dealerships.
Of course “channel stuffing” isn’t confined to cars sitting unsold on dealer lots. Automotive manufacturers are “parking” excess inventory wherever they can find the space.
“All around the world there are huge stockpiles of unsold cars and they are being added to every day,” the website Zero Hedge notes. “They have run out of space to park all of these brand new unsold cars and are having to buy acres and acres of land to store them.”
Take a look …
(Click to enlarge)
(Pics via Zero Hedge)
What’s driving this epidemic?
Easy: Customers’ inability to afford new cars. Last year automotive market research firm Polk reported that the average age of cars and light trucks on American roads had reached a record high of 11.4 years – up from 11.2 years in 2012. Polk predicted the trend would continue through 2018.
To some extent this increase can be attributed to better manufactured vehicles, but the real “driver” behind America’s aging vehicle fleet is deflated consumerism …