GM to Halt Truck Production


It’s not uncommon for automakers to engage in practices to control dealer inventories, but General Motors' recent decision to stop production at its Indiana truck plant is dramatic.

Quite a few people were caught off guard by the move to idle Fort Wayne Assembly for two weeks, starting March 27. Some have erroneously concluded this is GM trying to keep inventories low so it and dealers can keep raking in big profits, but the truth is far different.

The reality is truck inventories at Chevrolet and GMC dealers are starting to pile up as demand softens. That turn of the market has shocked many, since just a year ago trucks were king, with bloated sales prices which more often than not punched well above MSRP.

After shopper demand surged during the COVID-19 pandemic, the party has come to an abrupt halt. Interest rates continue to climb, inflation has pinched everyone and people no longer are eager to shell out big money for a new truck or much of anything that isn’t absolutely necessary.

In other words, all the talk about 2023 not being a rocky year for the auto market is ringing increasingly hollow. As shoppers’ ability to borrow money is diminished and everyone has less expendable income than they did even a year ago, automakers are looking at some lean times ahead.

Before you think this is just a GM problem, Cox Automotive provided inventory data to Reuters that confirms Ford and Ram are struggling as well.

While the Detroit Three try keeping dealer inventories lower than they were in 2019, this market downturn is throwing a monkey wrench in that scheme. For anyone who can afford to buy a new truck in the coming months, they will have far more negotiating power than during the height of pandemic.

We thank Motorious for reprint permission.

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