The inventory at GMC dealerships is therefore running about 10 days supply higher than the 60-day level usually judged optimal by automotive sales organizations. 70 days supply means enough vehicles are available to continue selling for 70 days at current sales volumes assuming no restocking took place.
GMC’s slightly elevated inventory levels are likely related to dealers’ current difficulties in selling full-size pickup trucks and other higher priced vehicles. Full-size pickups from all brands had an average 79 days supply in February, while cars under $40,000 ran at 40 to 44 days supply and those costing less than $20,000 had 20 days inventory.
Despite an unsold backlog of more expensive pickups piling up at dealerships, incentives remain low in historical terms. Companies seem reluctant to take the plunge with higher incentives before their competitors do, or, as Cox economist Charlie Chesbrough remarked, “Right now, it feels like automakers are waiting for the other guy to blink first.”
GM’s response to mounting backlogs of pickup truck inventory includes a planned two-week idling of the Fort Wayne Assembly plant in Indiana, kicking off on March 27th, 2023. This pause will suspend production of GMC Sierra pickups, as well as the Chevy Silverado, the days supply of which is currently somewhere in the 90s.
A second, involuntary production pause is under way because of the temporary shutdown of GM’s truck-producing Silao Complex in Silao, Guanajuato, Mexico until March 21st. An unspecified parts shortage has caused manufacture of Silverado and Sierra pickups to halt at Silao also. Together, these two gaps in truck production may have the effect of lowering GMC’s days supply of inventory closer to optimal levels.
Across the U.S. automotive industry as a whole, February data shows an inventory of 1.8 million vehicles, amounting to 56 days supply. This is only marginally lower than January 2023’s 57 days supply. Nevertheless, the total number of vehicles in inventory is approximately 2 million units lower than the supply at dealerships in pre-pandemic February 2019.
Out of the major vehicle brands, Chrysler had the biggest amount of unsold inventory for the month at 133 days supply. The smallest inventory was that of Toyota, at less than 30 days supply.