General Motors has been grappling with tight inventory all throughout 2020 thanks to a mixture of low production volumes at its assembly plants, mostly due to COVID-19, and surprisingly strong demand.
GM said previously that it hoped to have 600,000 vehicles in its nationwide inventory before the end of the year, which would bring it closer to its usual level of 800,000 vehicles. That now seems unlikely, though, as the tighter inventories have been a blessing in disguise for many dealerships.
Speaking to Automotive News, GM CEO Mary Barra said the tighter inventories have had numerous advantages for dealers. With less stock to choose from, customers are more likely to pay closer to the vehicle’s original sticker price. The lower inventory also means reduced operating costs for dealerships through inventory insurance and floor plans, among other expenses.
“There’s a real opportunity to improve our business and improve the way we work with the dealers — having the right stock, reducing complexity, making it simpler and providing an overall better customer experience,” GM CEO Mary Barra said. “And that’s what we’re committed to do.”
While GM will maintain a tight inventory on many of its vehicles going forward, dealerships are still asking for more full-size pickup trucks and SUVs, which have been in extremely high demand throughout 2020. One Chevy dealer that spoke to AN was concerned about having a lack of inventory on more popular products, like the Chevy Silverado and Chevy Tahoe for example, as they may lose a sale if they do not have the right vehicles in stock.
“If we don’t have a vehicle here to sell them, I think you risk losing that customer,” he said. “Lower inventory levels are a good thing. But at the same time, you’ve got to make sure that the pipeline coming from the factory is on a more constant basis.”
GM President Mark Reuss remains concerned about the effects of the COVID-19 pandemic, particularly on its blue-collar workforce. While GM has put in place strict preventative measures at its assembly plants to curb the spread of COVID-19 within them, he knows that outbreaks at supplier plants, particularly from suppliers located abroad, could hamper its production output and impact its dealer inventory.
“I know everybody is doing the best they can but we have to keep that up,” Reuss asid.