Supply chain disruptions continue to hurt automakers’ where it hurts and there’s little relief in sight, as many experts predict the new vehicle shortage will last through to 2024 at the earliest. GM has not been spared from these parts shortages, with the American automaker currently holding 95,000 incomplete vehicles in its inventory awaiting various components.
In its second-quarter earnings results published Friday, GM said it continued to grapple with supply shortages over the past three months, negatively impacting its wholesale numbers. While parts shortages have been a running theme in the auto industry since early last year, GM had been managing the situation throughout 2022, but once again began experiencing snags in June.
“GM’s second quarter vehicle wholesale volumes were impacted by the ongoing semiconductor supply shortage and other supply chain disruptions mostly in June,” the automaker said. “As a result, GM will hold about 95,000 vehicles manufactured without certain components in company inventory until they are completed and will recognize revenue when they are sold to dealers, which is expected to happen throughout the second half of 2022.”
GM began stockpiling finished pickups in storage lots around its Oshawa Assembly plant in southern Ontario earlier this year. This backlog was mainly due to GM’s “build shy” strategy, which entails building vehicles without chip-intensive features or components, then fitting those missing features or components once additional microchips were sourced. While this is faster than idling plants and restarting them once chip supply returns, it can leave the automaker with a large backlog of vehicles that it needs to ship out once they are complete.
The automaker’s Q2 earnings report acknowledged there was “significant pent-up demand for GM vehicles amid low inventories,” with Steve Carlisle, GM executive vice president and president, North America, vowing to address the problem as quickly as possible.
“We appreciate the patience and loyalty of our dealers and customers as we strive to meet significant pent-up demand for our products, and we will work with our suppliers and manufacturing and logistics teams to deliver all the units held at our plants as quickly as possible,” he said.
In addition to microchips, automakers are also experiencing a shortage of other components, including plastics and seat foam made from petroleum-based materials.