It's also the dealership that is holding the bag when it comes to covering the costs for their inventory. The high rates haven't been helping them, nor has the inflated prices. Lower interest rates won't help much in a short term given the rising inventory levels and there needs to be buyers. Moving vehicles through lower margins at least generates cash while reducing interest and tax liability.
There's lots of inventory out there and the situation for some manufacturers, like Stellantis, the question then becomes what does 'right-sized' look for their business.
The dealerships are under contract to carry the inventory costs of X number of cars. So, if they sell, say, twenty percent of their inventory, it will be replaced by twenty-percent worth of new inventory. The manufacturer can’t reduce the build rate because they’re under contract with the UAW. They pay the workers whether the workers are building product or not. (Generally. Contracts vary.)
All these contracts are based on the business picture before the government got in and royally screwed everyone with the lockdowns and rules, regulations and COVID payments that skewed the long-term survival picture of dealers and automakers. For example, the government gave amazing tax breaks if you bought a hundred-thousand-dollar car. The first year you could take $100,000 off your taxable profits, then $80,000, then something lower the third year. All the while you were only making payments on the truck or car. This idiocy moved forward demand, also massively increasing the cost of every vehicle sold. A total fubar to both build and demand side. Then the impact all this had on financing was even worse. The default rate means banks won’t finance a purchase now like they did. People don’t have twenty thousand dollars to put down on a car. Most cars lose that much in depreciation just driving off the lot.