GM Truck Stock Threatening Profits as New Model Looms

Catching a problem early usually means avoiding it, but in GM’s case it’s looking like the opposite will prove true.

With three plants closed this year for retooling, things got tricky for General Motors. It needs to walk the line between letting its truck supply run dry and saturating its dealer network with more pickups than it can sell before launching its 2013 products. Understandably a difficult mark to find, the automaker is facing a bloated supply in the months leading up to its 2013 truck launch.

It had hoped to sell down inventory to between 200,000 and 220,000 by December 31, but Automotive News reports that the company’s stockpile swelled to 245,853 units by the end of last month. That’s enough to give the company an 80- to 85-day supply — 60 days is the average supply goal for a car company.

SEE ALSO: GM Truck Production Gap Divides Dealerships

Should GM fail to move its excess Chevrolet Silverados and GMC Sierras by the second quarter of next year — which is when the new trucks are due out — it will hurt the new product’s launch.

That all boils down to a good thing for new truck buyers.

Chevrolet and GMC truck sales were pigeonholed by competing clearance sales in the fall, which means both brands will likely need to count on the same tactics. GM vice president of sales operations Kurt McNeil said the first plan of attack will be adjusting production, but if that fails customers will probably see cash on the hood.

Then again, maybe not. McNeil says December is typically one of the strongest months for truck sales sales, and he expects the brand to end the year in the high end of the projected range, or maybe a little over that.

[Source: Automotive News]