The auto industry has faced a series of headwinds over the last few years, not the least of which was the microchip shortage and other supply chain-related issues that forced every major automaker to cut production, including GM. Now, GM Authority has learned that GM is once again cutting back on its production plans, this time as the result of a rail car shortage. The new rail car shortage arrives just as the parts shortage has begun to ease up, and is likely to result in further reductions in vehicle inventory.
According to a recent report from Detroit Free Press, which cites an unnamed regulator, there are an estimated 70,000 new vehicles waiting for shipment to dealers across the country as the industry struggles with the new rail car shortage. The report also indicates that there are currently thousands of units of the Chevy Silverado and GMC Sierra pickup parked near the GM Fort Wayne plant in Indiana waiting on rail cars for shipment.
Experts say that the disruptions will likely have a major impact on the broader economy. The rail problem has escalated as of late, and has affected food and grain shipments as well.
The rail shortage arrives just as GM is poised to launch several important all-electric models, including the 2024 Chevy Blazer EV and 2024 Chevy Equinox EV, both of which are produced at the GM Ramos Arizpe plant in Mexico. Notably, shipping all-electric vehicles can be particularly troublesome, as EVs can be heavier than their ICE-equivalents due to large battery packs, and as a result, fewer vehicles can be loaded per rack.
The root of the rail car shortage is attributed to a number of different factors, including faster-than-anticipated recovery from the microchip shortage, as well as routing and logistics issues. A shift in consumer demand towards heavier vehicles like trucks and SUVs, demand for Chinese-made vehicles in Mexico, and an increase in Tesla production have all put a strain on available rail cars as well.