AutoNews: GM To Purge Glut Of Pick-Ups

[megeebee]

GM must purge pickup glut

Production cuts ahead; incentives likely to increase


Jamie LaReau

Automotive News | December 24, 2007 - 12:01 am EST


DETROIT — General Motors plans to chop pickup production in January, but it may be too late to avoid a fire sale.

As of Dec. 1, inventories of the Chevrolet Silverado (153 days supply) and GMC Sierra (150 days) were bloated despite $5,000 rebates on 2007 models.

The market for full-sized pickups has been soft since the housing industry went bust. But inventories of rival brands Ford, Dodge, Toyota and Nissan are closer to the industry norm of 60 days.

As of Dec. 1, Chevrolet had 233,800 unsold Silverados, which is not a huge increase over its inventory of 219,600 units a month earlier. So what went wrong? When demand went soft, GM hesitated to trim production of the Silverado. The restyled 2008 model, which arrived in showrooms in November 2006, was still in its first year.

Too many pickups
Here are pickup inventories as of Dec. 1.
A 60-day supply is considered ideal.
Inventory in units Days supply
Chevy Silverado 233,800 153
GMC Sierra 82,900 150
Dodge Ram 117,200 120
Ford F series 186,100 100
Nissan Titan 21,100 105
* The Toyota Tundra is not listed because Toyota does not report inventory levels for individual vehicles.
Source: Automotive News Data Center


Too slow to cut

GM "clearly overproduced," says auto analyst John Casesa, a principal of the Casesa Shapiro Group in New York. "The weak market caught them by surprise. If the market was stable, their days supply should only be up by 10 percent, but the market weakened materially in November."

Chevrolet probably will have to boost incentives and advertising to unload those vehicles. "They have a lot of cash on the trucks, and now they have to spend a lot of money to advertise it to get the customer to bite," Casesa says. "They just have too many trucks to clear in the first quarter if they don't do it in December."

GM is coaxing dealers to order more trucks, and one dealer says he is feeling the heat.

Ken Fichtner, owner of Fichtner Chevrolet in Laurel, Mont., says he took an additional 10 Silverados last month, at GM's request.. This month GM asked him to take an additional 20 trucks, and he said no.

"I am sitting on a 13-month supply right now," Fichtner says. "They wanted me to go to an 18-month supply but we only sell 10 a month, and I'm in the heart of truck country!"

Fichtner blames slow sales on stingy rebates; Casesa notes that Chevy did not offer aggressive incentives on the Silverado until the third quarter. Currently, GM offers $1,000 on the 2008 Silverado and up to $5,000 on the 2007 version.

The pickup pack
Here are the top-selling full-sized pickups through November, with the percentage change from 2006.
Ford F series 635,520 –12.4%
Chevrolet Silverado 564,697 –3.3%
Dodge Ram 326,177 –1.5%
GMC Sierra 188,461 –2.5%
Toyota Tundra 177,336 58.30%
Source: Automotive News Data Center


Slash production

GM had little to say last week about its plans to reduce inventories. "Production exceeded demand for a period of time," said company spokes-man Terry Rhadigan.

But GM's January production schedule speaks volumes. GM plans a two-week shutdown of its truck plants in Oshawa, Ontario; Pontiac, Mich.; and Fort Wayne, Ind. And when those plants resume production, GM will eliminate a shift at Pontiac and Oshawa.

"Ford actually went ahead and closed some plants in December, whereas GM is waiting until January," says Haig Stoddard, an auto production analyst for Global Insight in suburban Detroit. "It's safe to say that GM overproduced."



SOURCE: http://www.autonews.com/apps/pbcs.dl...plate=printart
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[rueben44]

I am a huge GM fan but I will tell you why I think the Chevy's are not selling. They are ugly and have huge wheel gap. The GMC's look nice but man the new Chevy trucks look.....ugly as hell. Just my opinion but the front need a quick update and why don't they make 20 inch steel wheels standard with the covers that don't let you know what they are? That would help a lot.

[JBsZ06]

Toyota sells some of the wanna be trucks( I never heard of a truck that couldn't hold a plow because the chassis bends?) and that takes some sales out of the others..

Some people prefer buying somewhat competitive foreign vehicles and it doesn't take a brain surgeon to see domestic truck brands as well as others in the segments will decrease their sales..(It won't ever be me but its a free country)

Add in a poor economy...with home sales decreasing...as well as gas prices rising decreasing disposable income.. and it adds fuel to the fire of decreased sales from the class leaders..

As far as the trucks go? I like the GM lineup...

I can't wait to see the dual hybrid GM truck that gets 20 in the city and 22 on the highway..

If those are real numbers..thats a huge win...

A buddy of mine has the Dodge Hemi truck and its cool as hell but the gas mileage is piss poor at around 8 mPG?

I believe Chrysler is sharing the dual mode technology with GM and thats great...

I personally want the american brands to be superior..

Its our country. Lets not give it away.

JMO

[motorman]

before people bought lots of pickups because they were "cool" not because they were needed. now with the price of gasoline up these buyers are not there and only the people who really need a pickup are buying. you see how old my silverado is and i don't plan on buying a new one for all i use this one.

[jtrav91]

Originally Posted by JBsZ06

I can't wait to see the dual hybrid GM truck that gets 20 in the city and 22 on the highway...

I believe Chrysler is sharing the dual mode technology with GM and thats great...

I find it quite odd how supporters still don't refer to it by the official name: TWO-MODE

Won't that confuse the typical consumer?

[bmwboy2007]

I posted this regarding the 50th Anniversary IMPALA; For someone like myself, the Chevrolet AVALANCHE is the closest thing Chevy has to the American RWD steel bodied, V8 powered, expansive road machines of yore. It has none of the anonymity of recent automobiles either, but stands out boldly from the crowd.

(I say this as the owner of a black '07 AVALANCHE LTZ)

[Xtreme08]

Originally Posted by rueben44

I am a huge GM fan but I will tell you why I think the Chevy's are not selling. They are ugly and have huge wheel gap. The GMC's look nice but man the new Chevy trucks look.....ugly as hell. Just my opinion but the front need a quick update and why don't they make 20 inch steel wheels standard with the covers that don't let you know what they are? That would help a lot.

Chevrolet Silverado 564,697. I wouldn't say their not selling and I believe the state of the American economy is more to blame than the "look" of the truck. Hell, every time GM redesigns their trucks some people like them and some don't and as you said it's all a matter of opinion. You don't like the look of them where as I do. I'm guessing you also know people who don't like them whereas I know people who do. It goes back and forth.

And making 20inch wheels standard? Have you ever priced out 20inch tires? Didn't think so. That would probably lose GM sales as not everyone can afford to go buy those size tire after 80k.

188,461 + 564,697 = 753,158. GM must be doing something right.

[TORRED1]

Originally Posted by motorman

before people bought lots of pickups because they were "cool" not because they were needed. now with the price of gasoline up these buyers are not there and only the people who really need a pickup are buying. you see how old my silverado is and i don't plan on buying a new one for all i use this one.

I believe that you are correct sir, GM if truck sales are slowing down then you might want to consider getting that VOLT out ASAP, that is where the future is, there will always be a market for trucks but not like it used to be. Face the realities of business.

[member12]

20" wheels standard? I don't like spending $200 on a new tire everytime I run over a nail (it is a truck afterall). The 20" wheels are for those folks who ether bought the truck to pull something or bought the truck for it's styling. They are not taking it off road like a larger percentage of truck owners do.

People in homebuilding are keeping their old trucks running for now. That's a big industry. It's been kind of surprising how fast DR Horton and Pulte homes have fallen in just two years. The market slowdown hurt them, but the mortgage collapse really caused the problems.

Another problem is gas prices. Give the half ton trucks a small diesel and watch sales grow....or invest money in midsized trucks like the Colorado and the hot selling Tacoma. Or both.

Send those extra workers to the factory that makes Lambda SUVs.

[tom3]

I think you nailed on this, image is fine up to a point. Eighty dollar fill ups a couple times a week gets old fast. And resale on those Z71s is ridiculous. Hard lessons being learned.

Originally Posted by motorman

before people bought lots of pickups because they were "cool" not because they were needed. now with the price of gasoline up these buyers are not there and only the people who really need a pickup are buying. you see how old my silverado is and i don't plan on buying a new one for all i use this one.

[johnny smallblock]

Looks like Toyo will come awfully close to their 200K mark.

Is there a way to find out where in the country those trucks are being sold (how many in each state) by each maker?

[63GrandSport001]

With gas prices so high and the economy in the shape it is in overall vehicles sales are down with trucks and SUVs taking the grunt of the hit.

Next year is expected to be even worse then this year, Everyone just needs to produce less vehicles in order to keep inventory levels in check even the Japanese.

[bone]

G.M. can't put the 6-speed transmission into their trucks soon enough. I plan to buy a Denali PU next year to replace my '06 Lariat crewcab,which has been an excellent,totally trouble free vehicle.(Terrible gas mileage though.) I really don't need a Denali,however, I want the 6-speed auto so what choice do I have? Ford will have the 6-speed on the new F-150 next year and Toyota already does. G.M. will be the worse for ware for not having the speed as standard equipment on all V-8s.

[gmbow]

I use a truck as a truck and don't buy often. That is why I will wait for a 6 speed and rear discs standard before I buy. And whats with the fact you can't get an 18" wheel with the Z71 Sierra but you can the Silverado? Who decides such things? I have been waiting for the 09 Ram and F150 as I'm sure others are as well. I won't buy a Tundra but will consider the others seriously.

[rosco8]

$5000.00 rebates on 07 Silverados? does this included the Crew Cab? was told the rebate was 3000.00 im in the market for a New Silverado. I went to a Dealer in Denver and Saw a conversion truck with the lift kit and so on. Wanted to buy it was the Dealer was damn stubborn so i left the dealership, don't think that truck is going anywhere in the near future!