GM Pickup Inventories, Sell-Down Going Smoothly, Reuss Says

The auto maker needs stocks to remain above the industry average of roughly 80 days, because it has been idling assembly plants to changeover tooling for the ’14 models trickling in to dealers now.

James M. Amend, Senior Editor

May 20, 2013

3 Min Read
Reuss at lunch Monday with members of a group of 110 Detroitarea high school students being hired by GM as paid summer interns
Reuss at lunch Monday with members of a group of 110 Detroit-area high school students being hired by GM as paid summer interns.

DETROIT – General Motors North America President Mark Reuss says stocks of the auto maker’s large pickups are at healthy levels as it juggles production ahead of redesigned models hitting the market soon.

“We’re selling through them very successfully,” Reuss tells WardsAuto on the sidelines of a community event here today.

GM’s inventory of Chevrolet Silverado and GMC Sierra pickups closed April at 229,706 units, down 4.7% from 241,098 at the end of March, according to WardsAuto data. Days' supply stood at 103.

Typically, 103 days would be high even for pickups, which auto makers keep at higher levels because of the various body styles.

But GM needs stocks to remain above the industry average of roughly 80 days because it has been idling assembly plants to change tooling for the ’14 model trickling to dealers now.

If stocks fall too low, GM could jeopardize future market share of its most profitable vehicle, especially if rivals start incentivizing. If inventories get too high, the auto maker might have to discount to move the extra models.

“We’re hitting this perfect,” Reuss adds. “Whatever the truck, there’s demand right now.”

The executive speculates the industry might be riding Wall Street’s tailwind. Earlier this month, the Dow Jones Industrial Average closed at more than 15,000 for the first time. “The confidence piece is staggering,” he says. “I think the industry is catching a little bit of what the stock market is feeling.”

Reuss sees May sales stacking up nicely against last year’s result, when auto makers delivered a strong 1.3 million units, and says GM will skip the industry’s annual summer shutdown again this year.

“We’ll have some rolling changeovers, but we’re in launch,” he says, referring to GM’s aggressive product cadence this year as it turns its product portfolio from the oldest in the business to the newest.

GM’s redesigned 7-passenger cross/utility vehicles have been among the products benefitting from a re-freshening. The Chevrolet Traverse, Buick Enclave and GMC Acadia have logged double-digit sales increases this year, although they did cool off slightly by rising just 5.5% in April. Deliveries of the trio jumped a combined 62.4% in March.

Reuss says shoppers are migrating to the vehicles for other reasons as well, such as their combination of capability and fuel economy.

“There’s a niche there we own – a little bigger vehicle, a lot better fuel economy; and everybody does not have to buy all-wheel drive,” he says. “People are tuned in to that, and the mid-cycle enhancement is dynamite. We put a lot of money into (the large CUVs) and it’s paying off.”

Reuss’ remarks come after he announces a new program called GM Student Corps, which will provide paid internships to more than 100 Detroit-area high school students annually. GM and cross-town rivals Chrysler and Ford have been pitching in to help the city rebound from the economic crisis of 2009. Detroit currently is teetering on the edge of bankruptcy.

Reuss notes the internships will help GM find more talented designers, engineers and marketers, which he says are difficult to come by these days.

“We’re short of everything, and my competition would say the same thing,” he says. “It’s scary, frankly. If we do nothing and leave it unattended, nothing good will happen. Our workforce is aging, and we need really good replacements.”

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