As General Motors seeks to get the company’s U.S. inventory down to the industry average of 70 days’ supply by the end of 2017, once-prominent passenger cars are inhibiting the company from achieving its vital goal.
At Cadillac, where even the company’s three utility vehicles have far more than 70 days of stock, the brand’s four car nameplates have 137 days’ supply. At Chevrolet, where the brand’s somewhat excessive light truck inventory is largely due to an intentional increase in Silverado stock, there’s a 128-day supply of passenger cars. Granted, that figure is worsened by a stop-sale on Chevrolet Sparks that limited the city car to only 1,132 U.S. sales in the last three months and by a necessary Corvette stockpile in advance of a Bowling Green shutdown.
But it’s at Buick, where new and old designs alike are suffering from dramatically lower-than-anticipated demand, that GM’s inventory reduction methodology doesn’t seem to be taking hold. According to Automotive News, Buick dealers have enough LaCrosses in stock to last until the July 4th holiday next summer.
How did Buick develop such a LaCrosse glut, and is there a silver lining to this black inventory cloud?
Like floodwaters pooling in a reservoir, unsold General Motors vehicles are getting close to breaching the dam. Not since November 2007 has the automaker held so many vehicles in reserve, though GM claims there’s nothing odd about the buildup.
With several updated models either imminent or on the way, it would make sense for GM to stock up in order to keep dealers and customers happy during production gaps. In this case, however, the numbers don’t seem to add up.
Well, that was short-lived. After somewhat positive, very incentive-fueled results for the Chevrolet Camaro in September and October, November’s numbers told a very different story.
General Motors’ underwhelming launch of the sixth-generation Chevrolet Camaro produced significantly fewer sales in 2016 than the old Camaro managed in its final year. Camaro sales through the first eight months of 2016 were down 15 percent, year-over-year. But GM then threw down the incentive gauntlet in September with massive discounts, intending to clear an inventory glut.
It worked. Sort of. The Chevrolet Camaro outsold the Ford Mustang in September — and again in October — but inventory levels scarcely decreased. Autumn simply isn’t the time to sell large numbers of pony cars, even if the Camaro attracted more buyers thanks to average discounts of $4,700 per car.
Regardless, that two-month Camaro win streak turned out to be a two-month blip. General Motors scaled back Camaro incentives in November 2016. Consequently, Camaro volume declined, the Camaro was once again handily outsold by the Ford Mustang, and there are now 177 days of Camaro supply across America.
Inventories of unsold cars and light trucks have swollen to their highest levels since the recession while sales growth in the U.S. market has slowed significantly in the past five months. That combination could mean larger discounts and incentives and lower profit margins in 2014. According to Automotive News, a ll three domestic automakers started February with more than a 100-day supply of unsold vehicles. Industry-wide automakers had 88 days’ worth of vehicles at the start of February, the highest February inventories have been since 2009, when the industry was at its nadir.
AutomakerAug. 2013Aug. 2012Pct. chng.8 month
2012Pct. chng. BMW division24,52316,83546%188,997164,63615% Mini6,0235,7185%44,32943,6322% Rolls-Royce84796%6726326%BMW Group30,63022,63235%233,998208,90012% Chrysler Division28,67828,0702%212,495216,616–2% Dodge52,85847,34812%413,258344,55620% Dodge/Ram86,44573,41318%653,985537,50222% Fiat4,1904,1501%29,58528,5664% Jeep46,23942,8398%317,921325,945–3% Ram33,58726,06529%240,727192,94625%Chrysler Group165,552148,47212%1,213,9861,108,62910% Maybach–4–100%–32–100% Mercedes-Benz26,15122,68915%203,147182,08712% Smart USA99375332%6,3126,2811%Daimler AG27,14423,44616%209,459188,40011% Ford division212,212188,60813%1,649,8211,453,53614% Lincoln8,1928,1411%53,39957,078–6%Ford Motor Co.220,404196,74912%1,703,2201,510,61413% Buick24,65018,00037%141,880122,58916% Cadillac20,25514,70438%119,58690,93332% Chevrolet187,740169,97810%1,365,5441,270,5828% GMC43,20237,83814%303,254273,36611%General Motors275,847240,52015%1,930,2641,757,47010% Acura17,05115,6469%109,182101,4078% Honda Division149,381115,67529%944,267847,84011%Honda (American)166,432131,32127%1,053,449949,24711% Hyundai division66,10161,0998%493,116479,7893% Kia52,02550,0284%378,380386,809–2%Hyundai Group118,126111,1276%871,496866,5981% Jaguar1,7231,02967%11,1348,54630% Land Rover4,9383,72733%31,97228,03814%Jaguar Land Rover6,6614,75640%43,10636,58418%Maserati32621949%1,8621,7159%Mazda28,10622,23226%198,026185,3467%Mitsubishi5,2814,24924%40,98041,316–1% Infiniti11,88411,1557%71,87977,151–7% Nissan Division108,61487,36024%782,369697,42612%Nissan120,49898,51522%854,248774,57710%Subaru41,06128,29345%281,652217,78029%Suzuki*–1,968–100%5,94617,228–66% Lexus29,79224,23723%171,238150,60414% Scion7,6987,7220%48,95949,747–2% Toyota division194,047156,56124%1,313,5251,199,16310% Toyota/Scion201,745164,28323%1,362,4841,248,9109%Toyota231,537188,52023%1,533,7221,399,51410% Audi14,00511,52722%101,34688,39215% Bentley19815627%1,5651,40511% Lamborghini*46437%3683447% Porsche3,3273,02610%28,45622,27928% VW division40,34241,011–2%282,913286,750–1%Volkswagen57,91855,7634%414,648399,1704%Volvo Cars NA5,5186,319–13%44,00546,649–6%Other**2532463%2,0241,9633%TOTAL1,501,2941,285,34717%10,636,0919,711,70010%
Riding on strong pickup truck and sedan sales, Chrysler Group and Ford Motor Co. both posted 12% overall sales increases from last August. It was Chrysler’s 41st straight year to year monthly increase. A number of manufacturers’ sales were constrained by tight inventory of models in high demand.
After adding 600,000 units to its North American capacity within the past two years, Ford is trying to find ways to increase output of the Escape crossover and midsize Fusion, both of which currently have about 40 days supply. The Fusion is particularly in short supply on the east and west coasts, a good sign for any domestic automaker these days. A 60 day supply of cars in inventory is generally considered normal for the U.S. auto industry. Automotive News is reporting that at the Center for Automotive Research’s Management Briefing Seminars, held in Traverse City, Michigan, Ford VP for North America manufacturing, Jim Tetreault, said, “We’re still looking at how we get more out of every plant, and that’ll be a focus for as long as the demand is as strong as it is.”