Promise Kept: General Motors Tames Its Wild Inventory Surplus
Swelling to alarming levels roughly a year ago, General Motors’ vehicle inventory was still hovering around recession-era levels in the middle of 2017. In May, GM had a 100-day supply of light trucks and a 97-day supply of passenger cars. While that’s not a serious problem when factories are running full tilt to satisfy demand, the cooling automotive market brought reason for concern.
General Motors said there was no reason for anyone to become unsettled over the surplus. With several assembly plants undergoing retooling in the fall, executives claimed inventories would fall to normal levels before 2018. As it turned out, those production gaps played out exactly as the automaker hoped.
Despite having a 104-day surplus at the start of August, Automotive News reports that General Motors started 2018 with just a 63-day supply — its lowest level in two years. That’s an inventory reduction of 41 days over five months, including a 20-day drop in December alone. Considering GM’s overall sales also declined during that timespan, that’s some impressive work from its bean counters.
While the goal was likely achieved by certain line workers getting some unexpected “ time off” (or others having a nervous Christmas) in addition to scheduled retooling for new models, its good to see an automaker delivering on a promise. And, to its credit, General Motors has been pretty good about this as of late — which is not something that can be said of every car company.
[Image: General Motors]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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I just added a 2003 Pontiac Bonneville SLE to my GM fleet so I have over thirty years' supply now!
Yeah, hurricane destroyed vehicle replacement had NOTHING to do with this. Sheesh...
I'm no GM fanboy, but the fact that they are now nimble enough to be able to adjust manufacturing needs to the market without the threat of destruction is excellent. Say what you will, GM is a far more focused, tightly run and nimble organization now than it was 10 years ago. That's a massive improvement over where things were.
Is nimble another way of saying they've gone from being the biggest automaker in the world to number four in the blink of an eye?