GM Back To Its Channel Stuffing Ways
The Nikkei [sub] comes with the good news that “Japan’s automakers have finally resolved the inventory shortages that have hindered their sales in the U.S. market.” According to the Tokyo wire, Japan’s automakers “are in a better position to compete with their Western and Korean rivals,” now that lots are stocked again.
Well, not quite. Japanese inventories are still fashionably slim compared to some Detroit chubbos. Pop some Tums and have a look.
According to data compiled by Automotive News, Honda has a 54 day supply. Around two months are considered normal for the industry. Toyota however has only a 32 day supply, smaller Subaru has 30.
Let’s take this opportunity to look at all lots.
Days of supplyUnitsDays Apr 2012Days Mar 2012Detroit 3:1,534,9007072European231,3005342Japanese827,4004346Korean122,2002734The Detroit 3 definitely have no shortage of cars with an average of 70 days’ supply on the lots. The Europeans are at the current industry average with 53 days of supply. The Japanese have 43 days’ worth on the lots, but “the Koreans” have only 27 days.
UnitsDays 1 Apr 2012Days 1 Mar 2012HYUNDAI-KIA122,2002734SUBARU35,0003033BMW32,3003033TOYOTA230,4003236PORSCHE3,6004141NISSAN226,4004754JAGUAR LAND ROVER9,2004748DAIMLER AG44,5005145HONDA244,0005450MAZDA62,3005459Industry5457FORD477,3006068CHRYSLER GROUP354,9006166VOLVO15,0006366VW GROUP116,2006742SUZUKI6,8007268GENERAL MOTORS713,2008680MITSUBISHI22,50088125TOTAL2,715,8005457Indeed, Hyundai-Kia’s supply is the lowest of them all with only 27 days until empty. As indicated by the Detroit 3 number, American makers are generously stocked, but averages can be deceiving.
Ford and Chrysler carry a regulation two month supply on the books.
The absolutely worst of Detroit is GM with a nearly three month supply. Only consolation: Deadman walking Mitsubishi carries two days more. While days to sell are down industry-wide, inventory is increasing on GM lots: From March to April, it took a week longer to move an already sluggish inventory.
GM’s lot queens: Escalade EXT (144 days), Yukon (136 days), Yukon XL (133 days), Sierra (132 days), CTS (124 days), all Cadillac cars (123 days), all Buicks (121 days).
Have a look at this chart: No wonder that GM is losing market share. The cars are all sitting on the lot.
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What the hell is the deal with the constant denigrating of GM? Because they should know (have known) better. The world was their oyster, and despite warning signs for decades they continued to turn out substandard, irrelevant product. It took Uncle Sugar to help set them straight. Anyway, no one I know 'aspires' to a GM. They are either very targeted work vehicles (Tahoe boat towing, Chevy work truck, etc), or 'best deal, entry level' default vehicles. Yes, they build some very competent, competitive vehicles. But the parade has passed, and the Toyota/Honda/VW/Hyundai float is getting all the attention. Finally, you have moralists like me. Been screwed by GM crap long ago; never have and never will look at their products again. I work too hard for my money.... But in 30-40 years my generation will be gone, so maybe they have a chance.....
GM has a weak month, and now is on death's door? Just illogical and ignorant of facts. It has been said that market share is good for bragging rights, but volume makes the money, and GM's volumes are still rising here, and more so around the world, and they sure are making money- $9.2B last year despite losses in Europe. Globally GM is solidly #1, outselling #2 VW by nearly a million units and #3 Toyota by over 2 million units. You would not have to be the sharpest tack in the box to see through VW's hype about a couple hundred thousand trucks bridging the gap. It was not even close. Before anyone questions including joint venture China volume they should understand that VW gets about the same % of its globally volume from joint ventures there as well. GM wins, even over Toyota and VW if you just exclude all of their China volumes all together. Most importanly, GM has generated consistent profits with the all time record operating profit last year. In fact, GM's operating profit ranks near the top of any auto company every in history. Betting against them surviving would be a poor and uninformed bet. As for the taxpayers having their back- good political rhetoric, but completely ignorant of reality. There is no ongoing support for GM and with the new cost structure, there will not be any need.