The General attracted all kinds of flak for its growing inventory of full size trucks. When we raised the issue earlier in the year, we were chided for yellow journalism and blatant bias. Months later, the MSM woke up to the story, and when the Detroit News wrote that GM’s pickup truck inventory was “much higher than the less-than-100-day supply considered ideal for full-size pickups,” even the diehards accepted that the inventory may be a mite rich.
That problem just went away. Poof, gone, just like that.
Were GM’s dealers sitting on a mountain of full size pickups in November, enough supply to last for 139 days, a month later that inventory of BOFs suddenly is as lean as Heidi Klum on hunger strike. The year ends with GM’s plus-sized truck inventory sporting an ideal HWP. If GM’s stats are to be believed, then dealers just ripped through two months of supply, reducing the inventory from 139 days to a measly 80. GM’s truck inventory is right on target. All is good.
Did those trucks just fly off the lots, powered by incentives, easy money, and a rebounding economy? Well, they did. And herein lies the problem. The 80 days of inventory assume that the torrid pace of December continues well into the new year.
Let’s visualize the matter. Total inventory of GM pick-ups was up a little in at the end of November, and down a little at the end of December. Nothing dramatic. The drama starts when it is projected how many days that inventory represents.
Mathematically challenged may see nothing wrong in this graph. Someone who internalized the rule of three could rebel. How come 221,649 units are good for 80 days in December if a month earlier 245,853 units represented 139 days?
|Full-size Pickups, Days Of Supply|
Driven by generous discounts, and some year-end tax buying, GM pickup sales jumped from some 44,000 in November to over 72,000 in December. Should the December sales pace continue into the new year, then the 80 days would be correct. Should the sales pace fall back to November levels, then the full-size truck inventory would reflect 125 days. Which is more like the good old General we know.