Locating the desired vehicle at
a nearby dealer is not as straightforward as it used to be. Automakers have shifted their focus towards fulfilling customer orders rather than stocking up on inventory for lots and showrooms. While this approach increases the likelihood of getting your preferred specifications, it also means enduring potential delays of several months. This
strategy became pivotal when manufacturers struggled to match supply with
demand, but the current scenario presents a contrasting picture.
General Motors is temporarily halting
production at its
truck plant in Fort Wayne, Indiana, to prevent dealership lots from becoming excessively crowded.
According to
The Detroit News, the factory responsible for producing the Chevrolet Silverado and
GMC Sierra 1500 will pause operations for a two-week period starting on March 27. GM’s decision aims to sustain “optimal” inventory levels, as referenced in statements by the company’s CFO Paul Jacobson during the 2022 earnings call. Jacobson outlined GM’s objective to conclude 2023 with “50 to 60 days of overall dealer inventory,” a decrease of “20 to 30 days from mid-2019.”
This move signifies a stark departure from the trend observed over the past couple of years. While automakers adjusted their processes to produce vehicles in advance and store them until finalization,
GM is now halting the production of its two most popular light-duty trucks altogether. Upon reaching out to GM for clarification, a GM spokesperson forwarded the same response provided to
The Detroit News and other sources:
“Our production levels have risen over the recent month, with demand remaining relatively stable, leading to a rise in inventory. Consequently, in line with our earnings call statement, we are proactively managing inventory levels, including temporary plant shutdowns. These actions were factored into our financial guidance for 2023.”
It is understandable that automakers and dealers aim to minimize the time vehicles spend sitting unsold on lots. Nonetheless, witnessing a manufacturer deliberately opting to halt production, and then proceeding to act on it, is somewhat unconventional. Although not entirely unprecedented, given the recent global parts supply challenges, it does appear somewhat out of the ordinary.
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