GM supply fails to meet demand for four-cylinder Equinox and Terrain models

Article by Anita Panait, on March 13, 2012

Due to increasing popularity of the Chevrolet Equinox and GMC Terrain crossovers with four-cylinder engines, General Motors is having problems keeping up the supplies with the high demand. For two months, GM has been forced to restrict dealer orders for 2.4-liter four-cylinder vehicles, which account for a majority of Equinox and Terrain sales.

The restriction has prompted several dealers to order more 3.0-liter V-6 models than they would have preferred amid the surging fuel prices. Jim Cain, GM spokesman, confirmed that the company has placed "temporary order limits" on four-banger versions of the Equinox and Terrain.

"It's a function of a strong industry, a hot vehicle and very robust demand for the four-cylinder model," Cain said, adding that the company is working with its suppliers to increase deliveries of key components to meet demand. GM already informed its dealers that the shortage is temporary, although it did not specify when it expects the problem to be solved.

Cain revealed that GM is having a Tier 2 supplier problem related to certain parts that are fitted into the four-cylinder versions, ensuring that the trouble was not availability of the engines. Because of the supply problem, four-cylinder models only accounted for 79% of Equinox and Terrain sales in February, down from 87 percent during all of 2011. The supply problem also made dealers complain about receiving fuel-eating V6 models instead of the four-cylinder versions, since V-6 models are getting tougher to move due to rising gasoline prices.

According to the U.S. Energy Information Administration, the average gasoline price last week was $3.79 a gallon, up 20 cents from two weeks earlier. Eduart Lela, general sales manager at Herb Chambers Chevrolet Cadillac in Danvers, Mass., said that he “cringes” when he has to order V6 versions of the Equinox and Terrain, adding that he would have preferred all four-cylinders.

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