As General Motors pares down its inventory from a 120-day supply to a 90- to 75-day supply, some dealers are starting to get nervous at the low levels of profitable trucks and SUVs on their lots.
GM has closed its plants for an extended summer shutdown, and will not begin reopening the plants until July 13.
"I know GM is completing their reorganization, but we need those plants back online pretty quickly," says John Pitre, the general manager of a Buick, GMC, Pontiac, and Saturn dealership.
GM says it had a 788,000-vehicle inventory last June, a number that was reduced to 581,000 this year. Its goal is to have just 500,000 vehicles, but the number of trucks and SUVs being cut is disproportionate to the number of cars. Last June, trucks made up 57 percent of GM's inventory. This June, trucks and SUVs accounted for just 41 percent.
One of the hardest GM vehicles for dealers to obtain is the Buick Enclave.
"We have about 14 Enclaves left, but we're selling that many a month," says Pitre. One of the Enclave's twins, the GMC Acadia, isn't much easier to get hold of. "I have about 30 Acadias and sell about 11 a month."
Pitre said he also has a tight supply of the short-wheelbase GMC Yukon and the GMC Sierra pickup. Other dealers have complained about running low on Chevrolet Silverado pickups as well.
"You can't get an extended- and crew-cab truck," says Chevrolet dealer Gordon Stewart, who owns dealerships in Michigan, Florida, and Georgia. "The crew cabs especially - I might not get any until September, and I don't know how we'll get through July and August. You'll do your best to try and buy them from somebody else."
Mark LaNeve, GM's vice president of vehicle sales, service, and marketing, reaffirmed the automaker's resolve to reduce its inventory to more manageable numbers.
"I love dealers feeling lean, but not so lean that they can't conduct business," LaNeve said last week. "But four or five years ago we ran at a 120-day supply, and that's way too much inventory. It means too much incentive spending, and it causes dealers to have to pay more floorplan costs."
Dealers will continue to feel the squeeze until at least July 13, when the plants that build the Silverado and Sierra resume production -- but it may take a while for the formerly bloated dealerships to get used to their new, leaner sizes.
Source: Automotive News