General Motors’ sales may be off by about 40 percent this year, but many of the automaker’s dealers say they are in serious jeopardy of running out of inventory. GM drastically reduced vehicle output in the wake of the market collapse, causing inventories to fall by more than 25 percent compared to last year.
Thanks to sub-$3 gas, GM’s crossovers and trucks are in high demand across the nation. However, GM was burned the most by its gluttony of light-trucks when gas topped $4 last year, causing the Detroit automaker to heavily reduce its output. GM’s inventory of trucks is down about 16 percent this year, causing shortages on some dealer lots.
“You can’t get an extended- and crew-cab truck,” Gordon Stewart, a Chevrolet dealer, told Automotive News. “The crew cabs especially — I might not get any until September, and I don’t know how we’ll get through July and August.”
GM sales head Mark LaNeve acknowledges GM’s inventory is lower than normal, but says the current level is close to healthy. “I love dealers feeling lean, but not so lean that they can’t conduct business,” LaNeve said. “But four or five years ago we ran at a 120-day supply, and that’s way too much inventory. It means too much incentive spending, and it causes dealers to have to pay more floorplan costs.” GM current has a 90-day supply.
GM has idled 13 of its North American assembly plants in the past few weeks, greatly reducing overall output. Those plants are scheduled to resume production in the coming months, with some set to come back online by month’s end.
