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.

Chevrolet Silverado strengthens its spot as the most capable and the most diverse lineup in its segment through enhancements that promise improved appearance, connectivity, and comfort for its 2012 model.

The 2012 Silverado features new front-end designs, a special White Diamond Edition enhanced comfort and appearance, a new navigation radio that delivers connectivity, and available heated/cooled seats for the LTZ versions. The car offers an updated screen as well as an integrated hard drive that makes discs with map data entirely unnecessary. Moreover, the Chevrolet Silverado boasts segment-exclusive OnStar & SiriusXM satellite radio, USB and Bluetooth connectivity, and dealer-installed Wi-Fi system.

And except for the Hybrid models, all Silverado 1500s feature the Trailer Sway Control and the Hill Start Assist in conjunction with StabiliTrak, the electronic stability control system. This enhances performance under various driving and trailering conditions.

The Silverado 2012’s new and revised design also features a chrome mesh grille that is matched with a chrome surround for the LS and LT variants or a body-color surround for the LTZ model. What’s more, the LS and LT now sport a lower bumper fascia, which has a silver finish and which is more aerodynamic on two-wheel-drive models minus the tow hooks, as well as new 20” chrome-clad aluminum wheels.

Furthermore, the new Silverado offers four additional exterior color choices: Mocha Steel Metallic, Silver Ice Metallic, Graystone, and Carbon Flash Metallic. Also available are two more interior color combinations: Dark Cashmere/Light Cashmere and Dark Titanium/Light Titanium.

In addition, all Chevrolet Silverado 1500 models now come standard with a cruise control and a spare tire lock.

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Topics: gm, truck

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