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What Are the Logistics of Launching a New Car?

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author photo by Doug DeMuro February 2018

Hello, readers of Oversteer, and welcome to another round of Ask Doug, your favorite weekly column where you ask Doug a question, and Doug openly ignores it because your question uses the word "anyways."

If you'd like to participate in Ask Doug, you can! Just e-mail me at OversteerDoug@gmail.com, and I'll be happy to let you ask me anything you want to know, about any topic you wish, except I'll only select the letters of a lucky few.

This week, I've reached into the Ask Doug Archives to pick an older letter that I hadn't read before. I thought this letter asked an interesting question, even though the date is a bit old, so I've decided to respond to it. The letter comes from a reader I've named William James, and William writes:

Dearest Doug,

As a father of two young boys and the husband of a woman who likes to sideswipe dumpsters, I am in the market to upgrade our family hauler. We currently drive an '08 Saab 9-7x, or as most people know it, a Trailblazer with an interior that doesn't look like it was designed in 1992. We have been patiently waiting for Buick to release the new Insignia/Regal, especially the new wagon variant, as it has all of the features my wife wants and lots of cameras and sensors to help avoid dumpsters.

Buick announced that the new Regal would be released "Fall 2017." Since the Insignia and its cousins are made in Germany, and since we only have about five weeks left in fall, I have to assume that inventory is already on its way to dealers, and may even be at dealers right now. My question is, when does inventory typically show up a dealer before the launch of a new model? Around here, most dealer lots are small enough that there's no real place to hide a new model for weeks prior to launch. Or are manufacturers just that good at logistics to get new models to the dealers right before the launch day?

Yours Truly,

William James

First off, William James, it's commendable that you drive a Saab 9-7X. You are one of the proud few. As for your question, it's an interesting one. Basically, there are two ways this can work.

The first way is what automakers do the vast majority of the time: They announce an on-sale date of, for instance, August 1, and then they hold the new cars at the factory (or at the port) until just before that date. They begin shipping them to dealers during the very last week of July, and they hope the dealers wait until the on-sale date, but at that point it's pretty much moot; they can begin selling the cars pretty much whenever they want. This benefits dealerships close to the port or the factory, who often get vehicles first. In this case, it's the automaker who controls everything, and they don't ship the cars to the dealership early.

In some cases, automakers try a different tactic: They ship a few cars to the dealerships early and implore the dealers to wait, to use the cars as demonstrator models, and to avoid selling them until the official on-sale date.

This is generally a good idea, since it gives dealerships the chance to show the car to the public before it goes on sale, and potentially drum up interest. The problem: it doesn't work. If a dealership gets a handful of cars before the official, automaker-prescribed on-sale date, and the automaker says "Don't sell these," the dealer is generally free to sell them anyway. After all, the dealership is its own business, and the automaker can only dictate what dealerships do to a certain point.

Recently, automakers have been trying a tactic that goes somewhere in between: They send the dealerships one single vehicle, for demonstrator use only, and the dealership must agree they cannot sell it. I've especially noticed this is going on in the exotic car world, where many models are in high demand. By only giving one demonstrator to each dealership (and by making the dealer agree to keep it around), the automaker is ensuring the dealer will want to keep it around so they can show the car to potential buyers. This is probably the best way to handle it.

Meanwhile, automakers worried about a car going on sale on a particular date will generally keep the cars in their own inventory until the last possible second -- and then they release the floodgates.

Doug DeMuro is an automotive journalist who has written for many online and magazine publications. He once owned a Nissan Cube and a Ferrari 360 Modena. At the same time.

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What Are the Logistics of Launching a New Car? - Autotrader