GM's Inventory Woes

Edward Niedermeyer
by Edward Niedermeyer

For years GM’s inventory levels have been a major cause for concern. Falling market share lead to overproduction which lead to incentive addiction and falling profitability as GM tried to help its dealers clear their lots. But now that GM has cut production to the bone during its bankruptcy, dealers are beginning to complain to Automotive News [sub] that “right-sizing” is leaving them short on crucial truck and CUV models. GM’s summer shutdown ends on the 13th of July, but a rolling restart means some production won’t come back online until August. In the meantime . . .

Dealers are reporting as little as a single month’s worth of Lambda CUVs like Acadia and Enclave. GM is adding another shift to Acadia/Enclave production at Delta Township, but not until the 24th of August. Meanwhile, Silverado, Yukon and Sierra are also in short supply, especially the extended- and crew-cab pickups. But even with the Camaro at a just-launched supply of six days, GM’s overall inventory levels show a ninety-day supploy of vehicles. Which means losers are clogging up lots while more popular products can’t be found.

GM’s current 90-day supply translates into a total of 581,000 unsold vehicles. That’s way down from the June ’08 number of 788,000, but there’s still some cutting to do before GM reaches its stated inventory goal of half a million vehicles. Which means availability issues could get worse before they get better. And further proves that deeper, faster, lean-ness isn’t always the answer.

With trucks making up only 41 percent of GM’s current inventory, it’s no wonder customers are having a harder time finding certain of the more popular configurations. GM spokesfolks say that GM had planned to emphasize cars and crossovers, and that a recovery in pickup and SUV demand is a welcome sign that the economy is improving. But if GM isn’t nimble enough to offer those customers willing to darken their dealerships’ doors with the products they want, well, what’s the point?

Meanwhile, the Washington Post‘s Charles Lane opines that dealers are figuring out that they need to keep up a healthy presence in Washington to balance the OEM’s attachment-at-the-hip to the federal government. With the Automobile Dealer Economic Rights Restoration Act of 2009 under consideration, dealers cut by Chrysler and GM could be reborn in the grace of the federales, a result which would likely cause GM’s inventories to head back upwards. Lane imagines the day when automobiles can be ordered online, and argues that

“Dealers claim to perform all sorts of valuable services — dealer “prep” and the like — that no one else could replicate. If so, they should be unafraid of competition. If not, they are exercising political clout at the expense of the car-buying public.”

But hey, who isn’t these days?

Edward Niedermeyer
Edward Niedermeyer

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  • AJ AJ on Jul 07, 2009

    ^I'm okay with the under 30 crowd having no interest in cars. Leave the roads to the over 30 crowd and they can take the bus or have mom drive them to buy their new video game. ;) Anyway, on my local news this morning, I heard that GM is starting back up truck production at some nearby factory (in Indiana). I was honestly surprised.

  • Obbop Obbop on Jul 07, 2009

    Pondering placidly. Possibility. Perhaps. Back in "the day" we had to drive or hitchhike or somehow leave the groovy pad and transit to "where the action is." Nowadays, what with the Web, the younguns can get to "the action" using their electronic brain and all those tubes the internet runs through. A world of action at their fingertips with no curfew, having to exert themselves physically (missing a ride from the party in another town when 16 I had to walk 12 miles to get home, etc)having to cough up gas money, not having public transportation available, etc. etc. Is there a possibility that the Web contributes to a shift in youth attitudes towards vehicles? Sure, not the only reason. Increasing costs must have an affect. Just peek at the cost of minimum liability insurance in many areas for youthful drivers. The socio-economic class I was raised in couldn't afford today's insurance rates. Then there's the barrage of brainwashing regarding "Green" and planetary warming and a host of other mantras that may be factual or false or somewhere in-between but the indoctrination leads to fad-like behavior and changes in habits and thoughts, perhaps affecting enough youth to make carlessness a neato nifty cool and pert-near groovy life-style to grab onto. Not that there's anything wrong with that. Pondering possibilities concluded. Film at eleven. Or 24/7 via HeyYouTube or one of a plethora of venues that did not exist when the delicious 440-six-pak machine hit the showroom.

  • 28-Cars-Later I guess Santa showed up with bales of cash for Mitsu this past Christmas.
  • Lou_BC I was looking at an extended warranty for my truck. The F&I guy was trying to sell me on the idea by telling me how his wife's Cadillac had 2 infotainment failures costing $4,600 dollars each and how it was very common in all of their products. These idiots can't build a reliable vehicle and they want me to trust them with the vehicle "taking over" for me.
  • Sobhuza Trooper Like fusion power, the I.D. Buzz is only 30 years away.
  • Lou_BC "respondents between 18 and 80 years old" Basically anyone deemed an adult who might be allowed to drive.
  • Lou_BC They will do fine if they come up with some cool sedans ;)