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Infiniti will overhaul its distribution system in the US over the next 18 months with the goal of reducing dealer inventories and raising standards. The new system will work on a 45-day vehicle supply. The brand wants to move away from the notion that having less than 90 days of supply is "underinventory."

Another change to the system will be the ability for dealers to swap with other dealers before their vehicles enter the country. This will commence in January 2014 with the introduction of a new dealer margin and bonus plan.

Read the full story here --> Infiniti wants smaller dealer inventories and higher standard
 

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This sounds like a way to keep the prices of these cars up. Think of it this way, lower inventory forces the prices up because the chance of the car you want being available is substantially lower.

I buy Infiniti products because I like the options, design and pricing from my dealer. However, if I go into my dealer and get the "run around" on price or availability, I'll be looking elsewhere for my next car.

Add to that the "discourging" of dealers to exchange vehicles to match a customers request is effectively tying the dealers hand to make a sale.
 

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This sounds like a way to keep the prices of these cars up. Think of it this way, lower inventory forces the prices up because the chance of the car you want being available is substantially lower.

I buy Infiniti products because I like the options, design and pricing from my dealer. However, if I go into my dealer and get the "run around" on price or availability, I'll be looking elsewhere for my next car.

Add to that the "discourging" of dealers to exchange vehicles to match a customers request is effectively tying the dealers hand to make a sale.
Hmm, I disagree. I look at it from a broader managerial view. Efficiently managing inventory is a crucial task for any business whose operations are driven by large asset inventories; lower inventory reduces operation costs--which btw has no direct (or inverse) relationship with pricing. Strategically, Infiniti could minimally spike prices as a result of any incremental savings, but one can't reasonably conclude that Infiniti has this on the table based solely on inventory reduction. Again, I argue that this is simply a smart business move that any asset-heavy business should (and does) make; it's certainly more lean to have a higher inventory turnover ratio as compared to a lower one. Excess inventory leads to obsolescence, especially in the auto industry. They can absolutely reduce inventory levels while satisfying customer demand. The capital tied up in inventory could be better spent elsewhere: new product (and technology) development, expanded marketing and sales, acquisitions, modernization, re-engineering, debt reduction...just to name some of the key positive benefits. This actually aligns with the publicly-stated visionary goals of de Nysschen to propel the Infiniti brand forward by expanding the lineup and competing on a solid footing with the leaders of the pack (a la Lexus, MB, BMW)--which does require mucho $$$. Inventory management is a logical place to squeeze some add'l capital without disrupting pricing. Personally, I like the direction where Infiniti is heading and think it's a good sign for the immediate future.
 
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If you mean interest rather than taxes, then yes.

It will be interesting to see how we can pull this off. The paradox here is that with the Q50, there's a much greater number of potential color, feature, drivetrain and model choices. As a result, inventorying a sufficient number of cars so that whatever a customer wants is in stock has become more difficult, not less. With G37 there was Premium (for all intents and purposes was standard), Navi and Sport. Plus the various colors and interiors. With Q50 you have that, plus hybrid, Deluxe, Tech, etc. Way more iterations. Plus, no one ever bought red. Few will buy Chestnut Bronze or Malbec, but other colors all seem popular.
 
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I would think its a good thing for dealers. Don't they pay taxes on cars that are sitting on the lot?
I've heard that. I know those cars have to be insured too. A properly managed inventory system is good across the board.
 

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Discussion Starter · #7 ·
No sense having a bunch of cars on lots that nobody is going to be buying. It will save lots of money if they have less cars on the lot. Dealers can always order in the models they need when people request them. hat is the point of having twice as much inventory if you have to order in most of the cars anyway. I bet that a rise in the amount of inventory does raise the amount of cars that people buy straight off the lot by that much.
 

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Or made by Lego.
 

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Now if only a manufacturer can figure out a way to have special orders have a turn around time of 2 weeks. A customizable car that you don't wait months for, that would be something.
I can see a 2 week turn around time with a car that isn't fully customized but if you order is simple enough then 2 weeks can work. If anything they should work on cutting it down from months to a month or just over a month.
 

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Maybe its just us OLD guys that buy RED. I love my Venetian Ruby Q50H.

With regard to tax, normally inventory carried over from one year to the next would be subject to inventory tax.
 
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