Having extra GMC Sierras and Chevy Silverados in their lots is reality for many dealerships of General Motors lately. For example, Rox Covert, a Texas dealer, has around four months' supply of full-sized pickup trucks at his two GMC and two Chevrolet establishments. He typically prefers a three-month's worth of inventory.
In 2011, GM started producing surplus pickup trucks to get through this year. The company's three truck factories will be idled for a total of 29 weeks as the automaker retools the facilities for its new-generation SUVs and pickups, set to hit the market next year.
The situation has left many dealers in a predicament. Some of them are turning away trucks, worried about having too many units in stock, while others are bulking up now for fear that their lots will run thin as GM's facilities sit idle.
Even as dealers of Chevy sell more vehicles than ever due to a revived product range, SUV and pickup truck units are still the lifeblood for many.
Some of these dealers state that increasing supplies of the aging full-sized pickup trucks require heftier incentives. Covert related that they have the "oldest truck in the game," adding that they could use something "stronger." The Sierra and Silverado were introduced in late 2006. Two years later, the present Ford F-150 was launched.
Chrysler Group is introducing a re-engineered Dodge Ram in fall. However, enhancing incentives would further reduce GM's profits, which will be squeezed in the second and third quarters due to lowered production.
The automaker has a cash incentive of $3,000 on crew-cab variants of the Silverado 1500, according to AIS Rebates, an Ann Arbor firm which offers incentive data to dealers. Some of the dealers are reticent to see their pickup stocks increase. One dealer who requested anonymity stated that he recently turned down his share of at least 20 Silverado units. [source: Autonews]