GM will take out 10 weeks of truck production

Article by Christian Andrei, on February 4, 2013

Prompted by the 24% increase in its pickup inventories posted in the past month, General Motors has decided to take out 10 weeks of truck production. GM is presently preparing to present a redesigned Chevrolet Silverado and GMC Sierra in the second quarter. GM had ended 2012 with a pickup inventory that’s nearly meeting targets.

Last Friday, GM said that the number of trucks in its inventory increased to a 117-day supply at the end of January from 80 the previous month. Spokesman Jim Cain said that the 10 down weeks are a total for GM's three pickup plants to allow for the changeover. He said last Saturday that the plant downtime has been scheduled for months. GM aims not to go back to its former habit of heavily discounting vehicles to increase sales, which can harm brand and resale values.

Unfortunately, it now faces the challenge of high inventory levels. GM would need to balance getting enough of the older version of the trucks to sell to customers while not owning too many that it damages the rollout of the new product. Last Friday, Kurt McNeil, GM vice president of U.S. sales operations, said that the company has a good feeling about its present status and the fact that it’s entering an improving industry.

In a statement, the automaker said that as of the end of last month, it had 234,342 full-size pickups in its inventory. This stands for 45,774 more trucks than the previous year. It’s also 5.7% higher than the 221,649 reported at the end of December.

The 2012 target of the company was to end the year with 200,000 to 220,000 pickups in inventory, providing it with 80 to 85 days' supply on a selling-day adjusted basis. GM said that the increase in its inventory comes as last month’s Silverado sales increased by 32% to 35,445 units and Sierra deliveries rose by 35% to 12,846 when compared to the prior year.

Topics: gm, truck, production

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