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GM’s truck production cuts signal a shift in US auto sales

DETROIT — New car sales in the United States are expected to increase in February, but the decision of common engine large production cuts pickup truck at a U.S. plant points to new challenges for Detroit’s automakers.

According to data provided to Reuters by Cox Automotive, Detroit’s major pickup truck brands are facing growing inventories.

As supply chain bottlenecks ease, the determination of Detroit automakers to keep inventories tighter than they did before the pandemic will be tested. Automakers may have to choose between reducing production to avoid price cuts or offering wider discounts to boost sales. agency speak.

GM dealers have more than 100 days of supply Chevy According to Cox, the Silverado picks up trucks in stock, reflecting more vehicles on the ground and a seasonally slow pace of sales. The inventory level is over 100-day supply for rival Stellantis NV heavy duty pickups and Rams. Ford According to Cox data, Motor Co had the F-150s in stock for 92 days.

ONE GM A spokesperson said Cox’s numbers do not accurately reflect GM’s inventory situation. GM did not disclose detailed inventory figures. However, he said GM is acting to support its pricing strategy, which relies on holding less inventory than in the past.

Stellantis said in a statement that it has no plans to shut down operations at any of its North American plants, but is constantly reviewing inventory levels and will adjust production as needed.

Industry consultants JD Power and LMC Automotive forecast on Friday that the US car And the light truck sales for February will reach an annual rate of 14.6 million vehicles. This is up from a year ago, but still far below pre-pandemic levels.

Power and LMC said sales growth in February was driven by a 54% increase in sales to fleet customers.

Thomas King, president of data and analytics at JD Power, said in a statement.

GM says it has decided to close the Fort Wayne, Indiana assembly plant, where it was built chevrolet Silverado and GMC Sierra pickups for two weeks starting March 27 were made to maintain “optimal inventory levels with agency.”

Who blinked first?

GM, Ford, and Stellantis dominate the US full-size pickup truck market, and over the past two years have raised the prices of their models. truck to hit record levels as the supply chain struggles with limited production.

Dealers contacted by Reuters say some customers are currently waiting for better deals or are postponing purchases because a combination of high prices and higher interest rates makes vehicles inaccessible. Automakers are faced with a choice between lowering prices by raising prices discount or subsidized loans, or inventory tightening.

“What they’re doing is playing what I call a blink game – who blinks first. Especially on trucks,” said Ohio dealer Rhett Ri.cart, whose Ricart Automotive Group sells Ford and GM trucks at different stores.

Brad Sowers, president of Jim Butler Auto Group in Missouri, said high prices are hitting demand. However, he wrote in an email, “manufacturers don’t want the market to flood and being forced to quadruple incentive spending to boost demand will reduce their profit margins.”

Some discounts are popping up in the full-size pickup segment. Ram is providing 2.9% financing for 72 months loans for some 1500 . ram truck.

Power and LMC said fewer vehicles were sold in February than the manufacturer’s suggested price, and the average discount rose 4.7% to $1,335 a vehicle. Power-LMC says this is still far below pre-pandemic levels.


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