GM's Truck Inventories Keep Rising, Sales Keep Falling

What’s up this month at GM? Inventories of full-size trucks. What’s not? Sales of full-size trucks.

We’ve heard the GM party line about increasing inventories in advance of the plant re-tooling to build the new trucks. Which should be arriving before 2014. But don’t forget, we’ve always been at war with Eurasia.

And by that I mean, last June, GM had 288,000 full-size trucks sitting on dealer lots. As of the end of July, there are 238,165. And just like 2011, GM is not going to waver from the course regarding production levels or incentives. Automotive News quotes the Silverado as having a 136 day supply on the low as of the end of the month. Year-to-date, that figure rested at 124 days. Inventories have slowly crept up from past months, while sales for both trucks are at their lowest point since February.

The General had a pretty dismal month on the whole. As Bertel pointed out, GM’s retail sales were down, and their fleet sales were way down after being way up in June – likely as a result of them stacking the deck for their June numbers, to beef up their Q2 financial results. The prelimenary Q2 results aren’t looking good. As if that weren’t bad enough, their marketing chief just got turfed in a rather unceremonious fashion, their stock price is at an all-time low and they have shit the bed with the launch of their mid-size family sedan.

What would it take for GM’s truck stuffing strategy to go teats up? A spike in gas prices? The housing market not coming back amid economic uncertainty? From this vantage point, it’s looking like deja vu all over again, with the same mistakes being made over and over again, by the same players operating under the guise of a new GM. Says the Washington Post:

“Chris Ceraso, analyst at Credit Suisse Group AG, said this month that GM, already offering heavy truck discounts, may have insufficient demand that leads it to cut production as pickup sales lag the rest of the market. In the U.S. auto market, on pace to exceed 14 million sales for the first time in five years, slow-selling pickups are a rare weak spot.

A lot is at stake with full-size pickups. GM and Ford Motor Co., which makes more money on F-Series pickups than any other model, could use a stronger rebound in truck sales to divert investors’ eyes from European units that are piling up losses.”