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Cadillac, Lincoln Still Have Trouble Selling Cars

“Days to turn” remains one of the car industry’s better measures of demand. Low days to turn means car makes shipped from manufacturers spent little time on dealer lots before they are sold. High days to turn means dealers had cars in their inventories for a long time. In July, Cadillac and Lincoln had among the highest days to turn, an indication of their problems finding customers.

Car research firm Edmunds.com keeps days to turn numbers by month. In July, the industry average by make was 61. Two small brands were worst on the list. Mitsubishi, which just announced it will close its U.S. plant, had a number of 96. Smart, the small car division of Daimler, posted a number of 110.

General Motors Co.’s (NYSE: GM) Cadillac and Ford Motor Co.’s (NYSE: F) Lincoln also posted very high numbers. For Lincoln, days to turn were 94. For Cadillac, the comparable number was 86. By contrast, the figure for the Toyota Motor Corp. (NYSE: TM) luxury brand Lexus was 45. For Mercedes it was 53 and for BMW 60. The make with the lowest number was bargain brand Subaru at 22.

The numbers are another sign of how far Cadillac and Lincoln have to get to be even modestly successful against German and Japanese brands. In many brand quality surveys, the two do relatively well. The latest evidence of this is from the automobile research by the American Customer Satisfaction Index. Quality, it would appear, is not a drawback for the two.

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Among the reasons car industry experts give for the trouble at Lincoln and Cadillac is that they have limited model lines, at least compared to the other large luxury car companies. It will take years of product development to fix this, if it can be fixed. In the meantime, companies like Mercedes and BMW will ride huge marketing and development budgets to more models of their own, bristling with more and more advanced technology.

Days to turn may not be a perfect measure of the health of car makes, but it is a very good one. The two U.S. luxury brands continue to be swamped by low demand.

By Douglas A. McIntyre