GM comes up with ways to reduce large inventories of trucks

Article by Anita Panait, on December 6, 2012

General Motors Co. may implement a reduction in production or an increase in discounts in order to clear away its bulging inventory of trucks, which is more than double the typical levels. GM has to clear away its trucks inventory since at stake is the rollout of new versions of the Chevrolet Silverado and GMC Sierras – both of which are set for release in 2013 and are vital to the carmaker’s success for the year.

GM's large pickups, which accounted for around 23 percent of the GM’s sales in the US in 2011, are among the carmaker’s profitable models. Alan Baum, principal of auto-industry researcher Baum & Associates, told Bloomberg that if GM continues to have high inventories and then roll out the new products, it would hurt the launch of the new trucks.

Baum added that it is more important to GM that the new vehicles have an impressive launch. Usually, carmakers try to maintain around 60 days' worth of sales on dealers' lots. However, GM’s truck supplies swelled from 110 days in October to 139 days in November, as it was caught off guard by rivals clearing out 2012 model-year pick-ups.

According to Kurt McNeil, GM vice president of sales operations, adjusting production would be "first and foremost" in dealing with high inventory levels.

Sales of the Chevrolet Silverado dropped 10 percent to 30,674 units in the US in November while GMC Sierra deliveries slid 2 percent to 11,726. Brian Johnson, an industry analyst with Barclays Plc, forecasted in October that GM would have to cut back its first-quarter truck output by 35,000 units. He recently told Bloomberg that such a move would cost the carmaker nearly $1 billion in revenue.

Topics: gm, truck

If you liked the article, share on:

Comments

Recommended

In a game-changing move, Ford has revealed that it will soon produce its first ever all-electric CUV that will be built to be electric from the ground up, and it...
by - May 23, 2017
The wait for the Mustang’s GT-based Super Snake concept to be released is finally over. Shelby had recently collaborated with Ford Performance and Borla to come up with something that...
by - May 23, 2017
While the BMW M3 is making some noise in Abu Dhabi with its San Marino Blue outfit, Porsche on the other hand, is catching people’s attention in Dubai as the...
by - May 23, 2017
We first heard of the fifth generation SEAT Ibiza earlier this year, and last week, the company finally revealed the all-new Ibiza at the international launch in Barcelona. The new...
by - May 22, 2017
The aftermath of the Takata airbag recall still largely resounds in the automotive industry, as big automotive companies like BMW, Mazda, Subaru and Toyota were extensively hit with what is...
by - May 22, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries