Supply of historically low levels of highly profitable GM pickup


Duncan Eldred, vice president of Buick-GMC sales for General Motors Company, speaks next to a GMC Sierra Denali HD truck displayed during an event on Tuesday, January 22, 2019 in Chula Vista, California, USA.

Sandy Hafkar | Via Bloomberg Getty Images

The supply of highly profitable pickups from General Motors is at historically low levels months after the company resumed production due to a coronovirus epidemic this spring after closing plants nationwide.

According to Duncan Aldred, head of the GMC truck brand, GMC Sierra pickups at dealer lots range from 75 days to 90 days compared to supplies of 20 days or less. They attributed the low supply to the continued demand for pickups during the coronovirus epidemic despite the shutdown.

He said that we are continuing to sell fast this week. “It’s not a comment on the build schedule, it’s a comment on how fast we’re selling them.”

Plants that manufacture vehicles in the US and Mexico were shut down for about two months this spring due to the coronovirus epidemic. The pandemic was the company’s second setback to production and inventory levels after a 40-day UAV strike that ended in October.

While short supplies typically mean high transaction prices and profits, they can also halt dealer operations and cause customers to wait longer or lose out on a purchase. Other automakers with higher inventory levels may also offer better deals to entice customers.

This is not the case for GMC Sierra, Aldred said, noting that the brand “has a share of its highest segment in recent history” despite it “having the lowest stock in history.” He also stated that the Sierra light-duty and large heavy-duty models have the highest average transaction values ​​of over $ 47,500 and $ 65,000 respectively.

But dealerships like the Gulf Coast Chevrolet Buick GMC in Texas – America’s best-selling truck marketplace – need a lot of their pickup. Craig DeSafe, the executive manager of the dealership, said the pickup typically accounts for 75% of their inventory. They are now only 25%.

“Out of here, south of Houston, this is truck country. That’s what we all do,” he said. “This is pickup truck country, big time.”

DeSerf said some people are upset that there is no inventory but it is still better from a business point of view than it is too much. “Not to be greedy, it’s better this way than the other way around,” he said.

Over the weekend of Labor Day, an important selling time for dealers, JD Power reported there were more than 500,000 pickups on dealer lots. This was compared to 900,000 sold over the weekend in September last year.

2021 GMC Sierra HD Pickup

GM

Despite the epidemic this year, pickup sales have been relatively flexible. According to Edmunds, sales of full-size pickups such as the Sierra model in the US are off at only 8.8% through August, down 22% on the overall market.

Retail sales, or for individual consumers, are even narrow. JD Power’s reported retail pick-up sales through August are only 3.5% while the rest of the industry is off 18.9%.

According to Aldred, most GMC pickups are being sold to customers before they arrive at the dealer lot.

“I don’t know if there is such a case in the industry, but it is definitely with us,” he said. “My challenge is to sell them quicker than manufacture. They can be manufactured anytime. There is some good, healthy competition there. We’re never going to turn off gas.”

According to GM the supply of Chevrolet Silverado – Sierra’s pickup under GM – is 26 days or less.

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