General Motors is positive that it will be able to work through its bloated inventory for pickups without throwing cash on the hood, partly because the stockpiles are needed to get through plant downtime in 2012.
The company disclosed that at the end of July, inventories of its full-sized pickups GMC Sierra and Chevrolet Silverado are at a 115-day supply or 209,000 units.
According to Don Johnson, vice president of U.S. sales, the figure is "higher than usual and higher than we would normally prefer."
However, Johnson states that GM foresees its pickup inventory declining to a 90-day supply by the end of the year. Johnson added that the company’s goal "is absolutely not to be discounting trucks to drive sales." He further stated that improving vehicle sales in general and an uptick in the full-sized pickup segment in particular will soak up some of the excess.
Johnson said that pickup sales are generally better in the second half. Moreover, moderating gasoline prices should stoke demand, he added. Still, GM states that the 90-day inventory target would be around 200,000 units, or around 40,000 more than it had at the end of 2010.
Johnson said that around 10,000 of those extra vehicles are required in order to meet the increasing demand. Also, 30,000 will compensate for lost production in 2012, the time when the company will be retooling its pickup factories to prepare for a redesigned unit.