Every year, every car manufacturer produces tons of cars. And of course, not all of them are sold during the year. My question is where are all those unsold new cars reside? If I go to a dealership (Honda, Toyota, Mazda, BMW, any dealer) they only have either brand new (regarding year, not a condition) cars or used ones. What if I want to buy let's say 2008 Audi A4 that was never sold to anyone and basically smells like a factory. Where can I find those?
When the 2016 models come out, the dealership marks down the 2015 model and then it sells pretty fast. The process doesn't take that long in the car market because the 2015 models are just as good as the 2016 so if they are just a little cheaper, they will sell quickly. If you want a 2008 Audi that has never sold, you are going to be looking for a long time.
The same thing happens in every industry. Where are the older versions of digital cameras? Cell phones? Blenders? Digital pianos? Any item that changes from year to year sits on shelves for a little while after its replacement comes out until the retailer reduces its price by enough and it sells. The only exceptions are goods that depreciate very quickly or go bad, which are recycled or thrown away (like fresh produce, for example).
It seems kind of crazy at first that essentially all goods that are produced by the economy are consumed, but that's the magic of capitalism: prices make markets clear.
Other than being reduced to clear as others have suggested quite a few get sold to large motor stores.
You can often go in and find last years model with around delivery mileage at a very knocked down rate because most people would prefer the latest model direct from the dealer.
Doing this allows dealers to clear old stock incredibly quickly so they can promote the newest model exclusively.