It’s no secret General Motors’ rising inventories may pose a significant problem if its forecasts prove too optimistic. However, Automotive News reports GM is actually responsible for the most significant share of the U.S. auto industry’s inventory glut.
22 percent of unsold inventory in the U.S. right now is GM’s doing. As of May 1, GM’s inventory levels rose 37 percent altogether to create a 9.5-year inventory high. In comparison, other automakers saw their inventory levels climb just 0.6 percent combined.
GM maintains this build up is completely intentional as it forecasts plant shutdowns and retooling needed for future product. Additionally, the automaker is confident it will have a 70-day supply of vehicles by the end of 2017; the industry’s healthy average is a 67 day supply of vehicles.
Inventory levels from May 1 show GM has a 100-day supply of light trucks and a 97-day supply of passenger cars. Both are hardly healthy levels. GM CFO, Chuck Stevens, said GM is working to reduce its overall supply to 90 days’ worth by the end of June. Plant shutdowns are planned in Michigan and Ohio to help curb the glut.
The GM executive again reiterated the automaker’s intentions.
“Typically, you build inventory in the first quarter anyway, because the spring selling season starts,” Stevens said late last month.
GM announced sweeping idle time for its passenger car plants late last year to help shed mounting inventories and additional slowdowns—most recently in Spring Hill, Tennessee—will occur throughout 2017
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I remember last year when GM was showing their new Malibu. On the screen they were boasting about it being $21,000 but the model they were showing in the commercial was $37,000. We now have Impalas over $40,000. Until Trump lowers taxes nothing is going to get better. I’ve never seen American cars prices climb so high. Their discontinuing the SS becauuse they want over $47,000 for it. We’re in a time where people are taking 84 month loans and the average car payment is over $500. People’s wages could not catch up with rising costs. Yeah, the government saved GM, but they screwed them over. Like once they gave GM back full control of the company, the immediately fined them for the ignition key recall, but they knew all along it was going on. That was right after they fined Toyota for the unintentional acceleration scandal aka floor at stuck under the pedals.
I never paid anywhere close to the MSRP on any of the GM’s I bought.
but again I see what you are saying the MSRP will scare buyers away.
Why is Trump lowering taxes the solution to GM’s pricing and inventory issues?
The Chevy SS is being discontinued because the Holden Commodore VF will cease production in October 2017 when Holden’s Australian factory closes its doors forever.
GM makes up about 20% of the US market….so wouldn’t GM be about 20% of the unsold inventories?
There is an easy solution since there are people buying cars every day: Just prevent all foreign brand from importing cars for 30 days or more. When buyers can’t get a car at those dealers, they will visit the domestic dealers and buy their cars. The only downside is that the foreign brands will lose their profits. But the opposite side is a great benefit, as the new profits stay in the U.S.
Easier said than done. A 30 day ban won’t convince people to buy American, it’ll only harden their resolve to not buy American and they’ll simply wait out the ban.
You can’t force people to buy American. You can convince them, you can compel them, but you can’t force them by deliberately limiting their choices.
Can you say ” fire-sale ” . More great lease deals and 0% financing for 60 mos. are on the horizon .
Factories were running at capacity at most facilities and their forecast for future sales were too optomistic . The whole industry is starting to slow down as many consumers have already bought vehicles in the last 3-4 years that they will hold onto for up to 10 years in most cases . Of course there are still consumers that will want the latest models coming out .
Plant shutdowns and retooling for new models. Everyone is trying to make more of the increase in inventories as being the result of slower sales or some intended push for sales.
GM just wants to keep the sales level up as some lines are being retooled. This is a good strategy leading into the peak selling season.
Car sales could be stronger for the industry, but GM is less exposed than some of the big volume players.
It’s time for a fire sale.
Too bad I am not ready to purchase a new vehicle.
How do people in the USA buy a new car?
Is buying from the stock available at a dealer’s premises the primary way, or even the exclusive way?
While I have my new car purchases done that way, I understand that many people in Germany, and maybe the large majority of new car buyers command their specially configured car and have to wait weeks, if not months or more until that specific configuration and color etc has being built. The success of a new car model is often measured by the length of time people have to wait for their car.
For the USA, OTOH, I read quite often about the length of time a car stays in the dealer’s premises.
Sorry, I forgot to enter the link to the Vauxhall configurator. Here it is:
http://www.vauxhall.co.uk/tools/model-selector/cars.html