GM Racing to Raise Inventories of Chevy Equinox

DETROIT – General Motors expects to recoup production of its No.2-selling vehicle sometime around the New Year after a strike by workers at one of the automaker’s Canadian assembly plants stretched inventories of the Chevrolet Equinox thin.

“We couldn’t be in a better position coming out of a strike,” says Steve Majoros, director-marketing, cars and crossovers at Chevrolet.

The Detroit automaker lost 850 units of Equinox production daily during the nearly month-long walkout in Ingersoll, ON, Canada, according to WardsAuto data. The strike began Sept. 17 and was resolved Oct. 14, leaving GM with 39,648 units in stock for a 39 days’ supply as of Nov. 1.

A days’ supply in the mid- to upper-60s is considered adequate to satisfy demand, but the Equinox sells more than 25,000 units each month. So far this year, GM has sold 238,007 copies of the 5-passenger crossover, up 23.1% from 193,400 last year.

The Equinox also was completely redesigned a few months ago and occupies one of the industry’s hottest segments, which combines to lift demand even higher. Last month was a big one for U.S. automakers, too, with a seasonally adjusted annualized selling rate of 17.98 million units.

Majoros admits GM may have missed some sales during the inventory crunch and says availability will be tight for several more weeks until the automaker can make up lost output through overtime at Ingersoll, as well as additional imports from two Equinox assembly plants in Mexico.

“It will be a bit of a rocky ride,” he tells WardsAuto on the sidelines of a Chevrolet business update here. “But they’re coming. We’ve got a lot in transit.”

The strike by Canada’s Unifor union occurred after it was unable to secure status as GM’s lead Equinox assembly plant. The designation would have given Ingersoll priority over the Mexican plants, where labor is cheaper, if demand weakens and forces production cuts. Workers felt their future was in jeopardy after GM moved all production of the GMC Terrain, a sister vehicle to the Equinox, from Ingersoll to Mexico. The production shift led to the layoff of 600 employees.

Details of a new 4-year contract between GM and Unifor at Ingersoll were not released, but the automaker reportedly created a $240 million fund to support workers should it decide to close the plant.

Despite the lack of inventory, the Equinox has gotten off to a hot start with its redesign, Majoros says.

“It’s a great story for us,” he says. “Equinox is out of the gate strong.”

Equinox buyers cite quality, reliability and dependability as top reasons for buying one and the buyer demographic is skewing more female, as GM hoped. It also is being cross-shopped against the competition more often and, excluding sales to rental companies and large fleet operators, Equinox deliveries are up 30% and it is gaining market share, Majoros reports.

“We’ll hit our sales targets,” he says.

The larger Chevy Traverse crossover, which GM also redesigned this year, is out of the blocks quickly as well, Majoros reports. Consumers are responding to a more truck-like design for the Traverse and average transaction prices are challenging longtime segment leaders such as the Ford Explorer, Honda Pilot and Jeep Grand Cherokee. Top-trim models sell for more than $53,000.

At the same time, the Traverse is maintaining a strong value proposition at the lower end of the transaction line, where it has traditionally been strongest.

“It’s a little bit of defend and a little bit of attack,” Majoros says of the Traverse sales strategy.

The Traverse sold 99,962 units through October this year, an increase of 2.9% from 97,126 in the same period last year.

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