Wild Ass Rumor of the Day: GM Channel Stuffing?

Robert Farago
by Robert Farago

Channel stuffing means forcing dealers to take more cars than they can sell, or making the vehicles and parking them somewhere or other. It’s an art that was perfected by DaimlerChrysler just prior to the automaker’s assumption by Cerberus Capital (a company more than a little familiar with the dark arts of dark arts.) The upside: the company books a vehicle as “sold” once it does an Elvis (i.e. leaves the building). The downside: there’s always a reckoning. One of our spies tells us that GM can’t cut production fast enough; new units are beginning to pile up here, there and everywhere. (Confirmation to robert.farago@thetruthaboutcars.com.) Meanwhile, one of our friendly GM store owners tells us that The General’s about to launch a new dealer incentive program. The new deal will encourage dealers to, as he puts it, “order unneeded and unwanted inventory.” “We’re talking about two to three thousand dollars in extra stackable rebates,” the mole reveals. “Depending on how much gas [new units] you take.” This does not please our guy on the front lines a bit. No sir. “It’s just great,” he kvetched with a dollop of sarcasm. “Unfair and unequal pricing to force franchisees into paying dangerously high floorplans.” Translation? “If you manage your units in a reasonable and sensible way, you are unable to compete on price.” Just another indication that this ain’t no party. [thanks to you know who you are X3]

Robert Farago
Robert Farago

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4 of 17 comments
  • Geeber Geeber on Nov 21, 2008

    I don't doubt that GM is doing this, because, from what I see, sales have just about collapsed for everyone. The local Honda dealer is literally overflowing with vehicles.

  • Adub Adub on Nov 21, 2008

    The local Chrysler dealer is overflowing with product, way more than it ever had. One thing to keep in mind, besides M-B and Toyota also parking fleets at the ports, is that one way to get around the new CAFE standards is to build like crazy before the standards go into effect. Granted, that is four years from now, but some suits at GM did cast it as a feasible option.

  • Bunter1 Bunter1 on Nov 21, 2008

    WAR? GM channel stuffing barely rates as newsworthy I would think. Bunter

  • Jeff Puthuff Jeff Puthuff on Nov 21, 2008

    We need someone in the Long Beach, Ca area to check out the port and see where they're stuffing the Mercedes, Toytotas and Nissans. I read an article where a new ship loading area is being converted to a parking lot. When all the big manufacturers start stockpiling, it truly illustrates how the market just absolutely collapsed.