Channel Stuffing At GM Hits Record: 574,000 Cars In Dealer Inventory, Despite No Interest Loans, Highest Car Discounts

Tyler Durden's picture

Earlier today GM announced disappointing sales numbers, with March car sales rising only 9.6% compared to expectations of 20%. Indeed, this number tends to be quite volatile: ultimately it is a function of how easy it is to get loans for purchases and, more specifically, the impact various incentives offered by its captive financing units. Why it was very disappointing is that as we reported a month ago, GM is once again back to its old gimmick of offering no interest loans, and rising discounts to the highest amount among US carmakers: "General Motors Co. is offering buyers interest-free financing on some 2011 models after the company increased discounts and incentives to lead all major automakers’ U.S. sales gains last month." As of yesterday desperate car buyers who can't rub two dimes together, can drive to the local unemployment office in the luxury of their brand new Chevy Imapala, or alternatively pick a just as worthless Chevy Malibu, HHR WAgon, Traverse SUV, as well as a Silverado, Colorado and Avalanche pickups, which are now offered at either 72 or 60 months of interest-free loans. "The 60-month deal also applies to the Buick Enclave and GMC Acadia SUVs and Sierra pickups." That pretty much covers the entire line up. And that's not all: "GM raised discounts 12 percent from a year earlier to an estimated $3,732 per vehicle last month, the most among major automakers and 45 percent more than the average, according to researcher Autodata Corp."

But what is most disturbing is that as the chart demonstrates, GM has now taken its indirect channel stuffing art to the level of a science, with what we believe is a record 574,000 cars held in dealer inventory. No surprise then that GM's Johnson sees no effect from Japan production on car production: after all the company will needs years just to clear existing inventory, and guess what that means for prices and for the viable competition, primarily in the face of Ford...

Chart says it all.

Source: GM

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bob_dabolina's picture

I wouldn't take a GM car if you paid me for its lot value.

Dr. Engali's picture

I would then I'd turn around sell it and put a down payment on a new BMW.

Sheriff Douchenik from AZ's picture

With what you got selling it, I'd call it one months payment instead of a down payment.

WALLST8MY8BALL's picture

GM Car or Goverment Cheese? Hmmmmmmm.........

hedgeless_horseman's picture

I wouldn't take a GM car if you paid me...

Nor would I.  However, many people are being paid to drive a GM bailoutmobile.  Where I live, every cop, sheriff, constable, homeland security agent, meter maid, district attorney, building inspector, fire inspector, health inspector, water official, sewer tester, and dog catcher is driving around in a brand new GM, courtesy of the tax payer. 

Did I mention we pay for their $3.59/gal gasoline, too?  So who cares about fuel efficiency?  A fleet of 14 mpg Tahoes, anyone?  Why the fuck not?|_2010_Police_|_Fleet_Law_Enforcement_|_Police_|_gm_cop_car

Miss Expectations's picture

I wonder if the Chevrolet Express Prisoner Transport (CEPT) comes in any colors besides black?

NidStyles's picture

How else do you expect them to keep up the $15 Billion a year War on Drugs?

tmosley's picture

I would.

Think of all the cool things you could do with it, like making a new and improved Carhenge, or destruction derby, or smashing them into tiny blocks and building a giant lego tower out of them!

The possibilities are endless!

bob_dabolina's picture

That would mean I would have to look at it.

camaro68ss's picture

I would take the engine out and put a BBQ under the Hood

Herman Strandschnecke's picture

Yeah, well, take a look at chevrolet UK to realise how lucky you are over the pond.

Talk about lipstick on a

patience...'s picture

I've also been seeing a lot of giveaways of Gov Motor products. Cabelas is giving away 50 trucks, a local casino is also constantly giving away GM trucks.

GubbermintWorker's picture

I work for the gov't and even I wouldn't buy a Governtment Motors vehicle!

tallen's picture

Looks like government motors is back on the way to chapter 11.

Dr. Porkchop's picture

Bankruptcy is passe.. bailouts are the thing.

Cognitive Dissonance's picture

Haven't we seen this movie before? I can't exactly place it, but it feels like a bad rerun to me.


Long-John-Silver's picture

The Second Dip has started and it will be worse than the first.

We are repeating the First Great Depression.

cossack55's picture

Must disagree. In the thirties people were desperate for work. Now they're desperate for 99 weeks free money and SNAP cards.

patience...'s picture

True but, as long as we linger like a ship without a sail the 99 weekers will fall by the wayside.

MachoMan's picture

Bingo...  they're all going to be handed a shovel very soon...

sun tzu's picture

They can always go on lifetime welfare. The welfare to work program passed in 1998 was repealed by Obamacare.

MachoMan's picture

Kind of like they can retire too and have a lifetime income stream? lol...  you can do anything until the money runs out or someone important enough calls bullshit.  I strongly suspect governmental handouts in the future will come with plenty of strings attached, including infrastructure repair...  e.g. work that requires a shovel.  The concept of sitting at home AND collecting money is going to be.....  a thing of the past.

quasimodo's picture

Curious what others here think will happen the price of petrol when we hit this double dip? I don't see it going sub $2 in my lifetime. Methinks it might behave quite the opposite as it did a few years ago

Rogerwilco's picture

It runs deep -- these days.

One of my poor-for-life relatives needs more debt like he needs a hole in his head, but the GM siren song of 0% financing is luring him ever closer to the rocks.

AR15AU's picture

Can't wait for these bailout queens to implode...

Cash_is_Trash's picture

Let them collapse, don't pick up the pieces for them damnit!

NotApplicable's picture

They will not be allowed to implode, or collapse, comrades.

My guess is that some Pentagon contractor will buy them all and use them to further mobilize all of the rebels in the Glorious Revolution.

Clockwork Orange's picture

Then shoot them.  On pay-per-view.

NOTW777's picture

is ben buying tractors? DE is rippin

Rogerwilco's picture

I heard there was a big shakeup at Kubota.

carbonmutant's picture

Sombody is. CAT gapped up this morning... again

cossack55's picture

On the news they may be fleeing the Peoples Democratic Republic of Illinois.

carbonmutant's picture

He's just trying to get Quinn to give him some tax breaks. Sounds

B9K9's picture

If we're driving down one of the major boulevards, I sometimes like to freak out my kids by asking them out of the blue if we should stop by & buy a new Corvette.

In fact, I state categorically that we could drive away with a new 'Vette in around 5-10 minutes. They know we have the economic means, but also know we're pretty conservative, so it doesn't compute.

The point I'm making, as I patiently explain, is that the entire economy is based on some schmuck signing on the bottom line. That's all it is - no jobs, no wealth, no production, just mindless, unsupportable consumption.

Cocomaan's picture

"Mindless unsupportable consumption" is right. Many are getting to the point where they realize you don't need a new car every year anymore.

NidStyles's picture

I've been driving the same truck since '98. The previous owner drove it since it was new in '89. I still get better mileage than most of the newer cars that are not all trunk and glass.

Mad Max's picture

The point I'm making, as I patiently explain, is that the entire economy is based on some schmuck signing on the bottom line. That's all it is - no jobs, no wealth, no production, just mindless, unsupportable consumption.

The problem is that once a sufficiently large portion of the population is corrupt and stupid, the functional rules flip over to bizarroworld rules, and people like you and me still following the previous intelligent rules are essentially bagholders for the idiot mob following the new "rules."

You need to ask yourself whether you want to stand stoically on moral principles that few still adhere to.  This is a very troubling question and I do not think there is an easy answer if one thinks about it.

cossack55's picture

The easy (and only) answer is YES. However, I have very few friends.

Almost Solvent's picture

Taking out a 0% loan over 72 months from Ally Financial (GMAC) with no real prospect of paying it back is no different than GM taking taxpayer dollars at 0% with no real prospect of paying it back.


Quick question: Getting a 9th credit card from TBTF bank to rollover the balance one can't pay anyway on the other maxed out 8 cards from TBTF bank; who is to blame?


Why not burn baby burn (the oil) while the getting is good? Absent some great leap forward in energy production, 50 years from now will look like 150 years ago.....

patience...'s picture

" 50 years from now will look like 150 years ago....."

Maybe not such a bad view.

Mad Max's picture

Except it will be a lot dirtier and nastier, and the only places you will be able to mine metals will be dumps aka landfills.  Really bright future.

hedgeless_horseman's picture

Have you read Kunstler's The Long Emergency, World Made By Hand, and The Witch of Hebron?


malek's picture

And the cherry on top is that some people still believe the schmuck is going to pay off the junk he signed for! Can you believe that??

hungrydweller's picture

Better to convert worthless fiatscos to some type of hard asset now, while you still can.  Even if it is a pile of dung on four wheels.

Long-John-Silver's picture

A Horse or Mule should be what you should buy. They don't run on gasoline which you can't afford.

Slartebartfast's picture

Bullish!  Very bullish!