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General Motors And Its Dealers Adjust To Tighter Vehicle Inventories

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.

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Comments

  1. Not only has the inventory been lacking but options and colors limited. They don’t make the GMC Canyon I want since last year. I don’t care what they advertise, 2020 Canyons are non existant in this area.

    Reply
  2. Personally, I don’t mind waiting for a vehicle when I order it with the equipment options I want. Been ordering vehicles for some years now. Works great!

    Reply
    1. A car guy almost all the vehicles I have had I have ordered from Corvettes to Cameros and everything inbetween
      for 50 years!

      Reply
  3. “Providing a better experience.” That means fewer choices and much higher cost. Thanks GM!

    Reply
  4. Oh, the dealers will love this lower production to push up their profit. The old song and dance of, this vehicle is rare, won’t find another like this anywhere, oh yes it does cost more ( cause we have jacked up the price to MSRP and more) but you better buy it today, it will be sold by tomorrow. I prefer to just wait to the end of the year, when the next year new vehicle models are arriving at the dealerships, and the dealers are pushing out old inventory with manufacture rebates.

    Reply
    1. Good luck with your Theory, for once that “old song and dance” is the truth and good luck waiting till the end of the year to buy a leftover because there won’t be any left to buy !!

      Reply
      1. Bokrock, have you checked the dealerships lately? They all have lots of 2020’s left over with super deals cause the 2021 are out, it’s called inventory clean out.

        Reply
  5. well, i don,t understand why you need a behemoth 4×4 truck when you live in the city??? I see these monsters all over my neighborhood along with huge suv,s and xovers. These monsters cost north of 50k +!!!!! High maintenance costs along with high emissions and expensive monthly payments should be suffice to drive people away, but not so with trucks??? Soon you will see cities worldwide prohibit combustion engines in cars and trucks. Hold onto your vehicles for a few more years and wait for a more efficient electric vehicle that is coming very soon. We may even get a federal or provincial rebate for buying one!!!!

    Reply
  6. Most lots now are low on high end model vehicles, especially pick ups. Less to choose from, longer waits if you order one be built means some customers will pay more to get one. One thing customers should know, the more you pay means the more that payment is each month. Maybe for once quality should be worth more than profits.

    Reply
  7. Trucks are in huge demand. You can’t haul 10 cases of toilet paper and a dirt bike in a Tesla.

    Reply
  8. Was at Dealer couple weeks ago for oil change. Service was so packed it was not Social Distanced. Figured I would wander through show room but was told ‘by appointment only’. Guess there really is nothing to see here. GM moved to Highway stores years ago because neighborhood dealers were too small. Now they have less too look at than the old local dealers had.

    Reply
  9. I’ve also been ordering my Corvettes and cadillacs for decades. Waiting 7 weeks is nothing.

    I get the vehicles the way I want.

    I’m happy

    Reply
    1. Try getting a Corvette in 7 weeks. LOL

      Reply
      1. How about 15 months!!!!

        Reply
  10. For years as a sales guy at GM they have overlooked one thing lost opportunity cost by not having adequate inventory. Customers can’t find it at GM so they go somewhere else. Last point when HM ships a vehicle to the dealer they get paid. GM Financial in most cases takes on the float for the vehicle cost. GM loses millions when they experience lower than normal inventory. Just a couple additional facts not mentioned.

    Reply
  11. It would be nice to see what I’m buying.

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    1. Agreed, but honestly I’ve driven enough vehicles at this point I know exactly what I want, I just can’t find it.
      I might just bite that bullet and order a vehicle if they ever add back any options to the Canyon. It’s just not how I’m used to doing business. I have a feeling I’m going to feel ripped off and never complete the sale.

      Reply
  12. Growing up on Long Island, NY and near NYC, all dealers lots were small. Some were no bigger than a small store front and some could only fit about 4 vehicles in the showroom. It was custom to order a vehicle for dealers had no room for inventory and when Chevy was selling 500,000 Impala’s a year, if they arrived on the lot they weren’t around very long. My first new car order was a 1973 Charger at a Dodge Dealer in Queens, barely any room for a showroom. I paid $3750 and waited about 6-7 weeks. When I moved away from LI in 1975 it was when I first saw dealers lots of 12 or more acres.

    Reply
    1. I grew up in Michigan. My first few cars were from the largest volume sellers of Pontiac and Oldsmobile in the US. If you wanted it, they probably had it on the lot to drive. Even when I insisted on crank windows way after the sell by date.

      Reply
  13. Keep buying your trucks and suvs. It lowers demand for the cars that are actually fun.

    Reply
  14. Low inventory to drive up prices is the key word. Your not selling toilet paper, this will backfire on you. Hopefully sooner than later, GM=Greed

    Reply
  15. They could have 750 vehicles in stock but all you would see is grays, white, and the $1,000 option colors.

    GM doesn’t offer colors. When they do, the dealer buyer won’t stock any.

    Reply
  16. Keeps the prices high and send buyers elsewhere. Good move people.

    Reply
  17. REALLY!!…This the business model or approach? Another great job by Mary Barra! Lets get this straight…You are telling us that inventory is low, so lets jab our potential loyal buyers with close to sticker pricing on what’s available?….How is that benefiting anyone but GM…not the buyer. This is the height of arrogance! This is why, after being a loyal GM customer for 40 plus years, I will never buy a GM product again. Wouldn’t a better answer, with some humility, be….we will do our best to boost production to catch up with demand to allow fair and routine pricing?

    Reply
    1. Well Said!

      Reply
  18. People are buying trucks and suvs because they are useful and worth the money. They are also fun to drive but make road trips much more enjoyable. Travelling within country has been on the upswing due to covid. People are heading to the country get away from city life.

    Reply
  19. Look ive played the game with ordering a 2021 Red Chevy Tahoe Rst since June 17,2020,
    Built online to my liking with my supplier discount, i got all the way to gm financing page and it was a frozen Link , never ordered that day figuring maybe something happened so i tried to order again and gm financing page wont open even to this day ,so i got nowhere fast. I tried at every dealer Chevy and even Cadillac in Massachusetts to do the same brought the printout of what i wanted and they wouldnt honor my discount on any 2021 ,instead there trying to push 2020 tahoes (which are the same price as 2021) which i dont want , It is November 16 ,still havent ordered or found a dealer in state or out to accept ,order,or even sell me a Red Tahoe Rst

    Reply
    1. David C: I occasionally do come across web sites or forms that won’t load and I find that by using a different browser the form will load. I have all Apple devices and I use Chrome or Safari. I agree the 2021 Tahoe is a far better looking truck especially the interior.

      Reply
  20. Imagine that 🙄. Lower inventory and higher prices 🙄🙄. Any one from GM have any brains! Guess how that’s going to pan out….sounds like a grocery store that I know of, the owner has the idea that to keep his shelves stocked at a bare minimum is going to increase his sales….needless to say, it’s not a very popular store. That is about the most absurd thing I’ve ever heard but I have to say it’s in line with the rest of GMs marketing strategy. Good buy Full Size GM SUVs holding on to your lead in market share…..so far the local chevy dealer has had 1, (just 1) new style Chevy Tahoe, another dealer 20 miles down the road had one about two months ago that sold about the first day they got it in. Come on GM. I would rather see Mary Barra go away than one of the biggest American Icons ever……CHEVROLET. How come other brands can keep their inventories “closer” to normal…

    Reply
  21. I do not know what the inventory problem is. If you read the article it’s not having enough inventory. Go to Chevrolet dot com and click on “Chevy Cyber Sales Event”. Select Tahoe, and it defaults to 100 miles of your zip code. For Orlando, Florida the are 307, 2021 Tahoe’s, in stock, 127 within 50 miles.

    Reply
  22. Chevy dealer near the coast Carlsbad has several 1500’s poor selection almost all crew short beds. 2 doors down the Ford dealer has 75 F-150’s to choose from.

    Reply
  23. Buy used, let someone else deal with the dealership bs and the initial depreciation!

    Reply
  24. I had to Total out a car with 4000 miles because general motors (Buick)has no parts.
    Beware this company is not stock parts
    I’ve been a loyal GM customer never again.

    Reply
  25. Sorry people i have a correction to make ,i did het thru the gm financing page and it directed me to go to the dealership to order, did that and they wouldn’t honor supplier discount and told me to do it online
    This Corona Virus has put 95 %of the country on island time. Might as well be named AM/PM

    Reply
  26. George S. there is and isnt a shortage but what they have is what you get . NOT even the Tahoe Rst they premiered in Detroit, Red ,try to find 1 Rst with just 2nd Row bucket seats ,impossible, all have 60/40 ,ok im going to spend 70k and supposed to take what i can get,search in the New England area Not a single 1 , So let’s get this straight ,when can I buy a 2021 in 2021 what’s the point might as well buy a 2022 , If I don’t buy a Lincoln Navigator by then

    Reply
  27. How about zero inventory and going online like Tesla and get rid of dealer burden and mark-ups?

    Reply

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