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GM Channel Stuffing Hits New Record
That GM sales declined in May by 1.2% on
expectations of a rise of 1.5% in May is not really surprising: as we
have been saying for a nearly three months now, the Japanese earthquake,
far from adding points to US GDP, is now impacting every aspect of the
US and global economy (yes, Japan is and will be the global economic wildcard for a long, long time: should we get Shirikawa
to agree to a $250 billion QE the dynamics of the global prisoner's
dilemma will change promptly). Furthermore, the bulk of these purchases
are the government-funded equivalent of subprime home purchases from
2005-2006: take away government funding and the sales collapse would be
historic. Yet what is surprising, and what continues to be the only
important metric in the monthly GM sales report, is the monthly channel
stuffing update, aka the "month-end dealer inventory." We hope nobody
will be surprised to find that it just hit another all time record of
584,000, 7k more than April and 177 more than a year ago. Although in
reality, considering that GM car assembly should have been impacted by
the Japanese earthquakes, one would have hoped for this inventory to
decline. Which is the truly surprising part. In other words, In May,
channel stuffing at GM went into overdrive.
But fear not: expect Phil LeBeau, should he discuss this truly ugly statistic, to announce that it is very transitory.
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Stuffed, bitchez
Cash For Clunkers II.
Cash for two year old just off leased cars and trucks...
Soon to be Government Motors, for the second time.
Nothing like getting a buying a overpriced car, thanks US Gov.
Knowing that anyone who disrupts the gloom/doom echo chamber in the comments section is immediately ridiculed, I apologize in advance for offering a different perspective on these numbers.
However, if GM sold ~221K vehicles in May and they have ~584K vehicles in dealer inventory, that is still only ~2.6 months worth of supply.
This is perfectly normal. No "stuffing" whatsoever, and perfectly in line with historical averages among virtually all the automakers. In fact, most of the Japanese automakers and dealers are in panic mode because they only have 30 days supply due to the earthquake.
And again, sorry to provide a different perspective, but I think it's important for the "real" truth to be told.
I too think it's important for the "real" truth to be told. Of the ~221K vehicles GM sold in May, how many were sold to government fleets? How does this compare to Ford both currently and historically?
Lord knows one branch of our government wouldn't be above buying assets from another .gov entity to "create confidence" and put union workers back to work.
For the rest of us, pay no attention to the inflation effect of this scheme, nor any per vehicle loss on financing transferred off GM's balance sheet to Ally Bank, formerly GMAC. Didn't Ally just get another tax-payer bailout?
Repeat after me. In the name of Project Mayhem I, ___________, will never buy a GM product.
None were sold as government fleet vehicles.
Those numbers reported today are retail.
Show me. Or did the government just pay retail prices?
DETROIT – General Motors dealers in the United States reported 221,192 total sales in May, including a 9 percent increase in retail sales compared to May 2010. Retail sales for GM’s brands were again propelled by the company’s lineup of fuel-efficient passenger cars and crossovers. Total sales declined 1 percent on lower fleet volume.
http://investor.gm.com/sales-production/
Those are fleet sales to businesses that are routed through retail dealerships. For instance, if your local construction company needs to buy 50 trucks for business.
You were speaking of government sales. Those are sold directly by the factory, not delivered through retail dealerships.
Bullshit. If this were true, then why don't you share the link to what would then be GM's unreported government sales, so we can see for ourselves and compare with Ford's government sales? As a taxpayer, wouldn't I have a right to know how many cars GM is selling to my government? Why would this be a secret? Is it not important for the "real" truth to be told?
PS: You sure are a real piece of work, Harry Wanger, swapping Ol' Glory for my state's flag. I guess, technically, you complied with my request.
http://www.zerohedge.com/article/gm-drops-day-low-3311-threatens-break-below-ipo-price#comment-741319
From household wares to gun slinging is a bit of a reach, no?
Nonsense. Pure and utter bullshit.
Prove your assertion or GTFO.
At least some jobs have been added this quarter, Government funded sock puppets.
yes...all those government cars are of Japanese make and are kept in a pool of twenty year old vehicles. Please...
For a US population base that is missing meals, can't pay for gas or afford the homes they are squating in, the first thing they want to buy/lease is a 30k car or truck? I am a bit skeptical about that.
+1
Mr. carpet-bagger, Sir.
Go check out those "sales" you are referencing. A lot of those Chevy volts are being "sold" by one dealership to another. It's nice: dealership A gets the $7,500 credit/transfer payment, dealership B gets to put a mint-condition car on its lot at used car prices, and both claim that the volt is selling like hot cakes.
Go back to bed, Tex.
Chevrolet sold about 500 Volts the month of April. I'm not sure what the sales were in May, but whatever it was, it's statistically insignificant.
Plus, a retail sale is only counted once, regardless if one dealership "trades" it to another for whatever reason.
Read this:
GM Dealers Gaming Chevy Volt Tax Credit?
http://blogs.insideline.com/straightline/2011/05/gm-dealers-gaming-chevy-volt-tax-credit.html
and no, Texas Gunslinger isn't from Texas.
I keep tellin y'all this fucker is not from Texas, a transplant maybe, but not a native..
That's why I call him a carpet-bagger. We all know he's in the fetal position in his sister's closet, 'cept when he takes a break to down a Monster or polish his stinger.
He's a Moby.
Most likely, he's an atheist, pedophile, cockholster from Massachusetts.
good point. also the graph indicates the growth is at least decelerating.
what baffles me is how the price of vehicles seems to be rising and I have the impression that the high-end vehicles are selling better.
are these guys investing in new products?
Fine, Tex. *You* buy their stock.
hanky panky at GM???
"Many Volts with practically no miles on them are being sold as "used" vehicles, enabling the dealerships to benefit from the $7,500 credit supplied by the American taxpayers on each car. The process of titling the Volts technically makes the dealerships the first owners of the vehicles, which gives them the ability to claim the subsidies. The cars are then offered to retail customers as "used" vehicles.
The practice of dealerships purchasing from one another is not uncommon. "Dealer trades" are done all the time in the industry. What is very unusual is for the receiving dealership to be able to maximize profits at the expense of taxpayers by claiming tax credits of $7,500. It is also very rare for dealerships to part with any model that has higher demand than supply, as GM claims is the case with the Volt. In addition to qualifying dealerships for a $7,500 tax subsidy, the titling process also allows GM to record Volt sales even if the cars are sitting on dealership lots."
Wow, that didn't take long.
Thanks for the chart.
When all channels are stuffed, then at some point there will be a clog and a backflow to the factory.
well there ain't no jap cars comin in, so the only thing holding back GM's total market domination is the suckassedness of their products
Well hasn't that just really been the problem the ENTIRE time? Poor business models and shitty product, generally lead to less sales and competitive advantage. (except when you have the government backing)
So....the Volt is too expensive for a "normal" buyer to afford and won't go far enough for a typical commute. No problem....the bamma boy is buying them all and giving them to Federal employees.........
Simply fking amazing!!
and if one expects senior management to pour these subsidies back into improving the Volt's fatal flaws, rather than driving their own bonuses for a "job well done," then you are simply either stupid, brain dead, heavily intoxicated, or all of the above.
They aren't managers, they are bureaucrats. If there is one "truth" bureaucrats know, it is that profits don't matter when all you have to do is take more from the taxpayer.
I always laugh when I think about about when the first news broke about how many of the promises by GM and the gubmnit about how great the Volt was turned out to be pure fantasy.
I just remember thinking about how my Ford Focus that I paid brand new for 16k in cash, was a better deal (by leaps and bounds).
I should just take a massive shit, put wheels on it and try to sell it as the most green vehicle around. A completely organic car, I can just see the fiat rolling in. Absolutely no manmade factories necessary to make it. (Ignore the methane gas produced because we all know that unintended concequences and indirect fossil fuel usage has no bearing on its enviornmental friendliness...)
eh...the problem was not this.
The problem was that GM's senior management found the ponzi usury racket in finance to be FAR more lucrative for well over a decade.
If you peek into GM's financials over the past 10 or 15 years, you see that profit growth was driven by GMAC, and that the car business became a neglected legacy sideshow. When the financial/housing bubble crashed, so did GM. Now they are left with having to live off of a core car business that was for a long time a complete afterthought and irrelevancy.
And the assclown-in-chief thought he deserved the title of "auto executive of the year". More like the heretofore impossible "Worst Executive in the Entire History of the US Auto Industry".
But I cannot believe that these cars are THAT bad that no one would buy it.
Hey, here in the ex-GDR we drove a Trabant, made from plastic, and that was OK and it worked.
We didn't have that much expectations and weren't that spoilt with gimmicks.
I mean GM are producing cars for 100 years now, so there must be experience.
It's not like they started yesterday with designing cars.
They made the DeLorean.
As long as it doesn't break every 1000 miles, and as long as it has a mileage of > 30 mpg, it is not bad.
So I don't understand why they sell almost NO car, after they sold hundreds of thousands of cars for decades and were so well-known and well-liked in the U.S. .
Because in the US most people are living the Greatest Depression while fascists juice the markets with more fake money.
Believe it, the GM cars are that bad as perceived by the public.
The Japanese cars, on the other hand, have not only gone UP in price, but also the used cars have gone up in price!
If you were smart enough to have bought one of those Japanese cars that are in demand, right after Fukushima, your car has gone up in value since you drove it off the lot. Dealers are actually calling up their old customers trying to get inventory. There was an article in the SF Chronicle IIRC this past week about it.
Your experience with the Trabant mirrors the American experience through the 1960s. There was essentially no competition, so quality was not truly an issue. For as much as I love early Detroit iron, I realize that those cars weren't all that well built. A car with 100k miles on it was considered to be used up and would need a motor soon. It wasn't until the Japanese deliberately started to overengineer their cars in the early 70s that American manufacturers faced real competition. When the oil embargo hit, many who owned American iron took a serious look at the Japanese cars - and liked what they saw. Yet it took a long time for the American makers to get the hint - American cars from the mid-70s through the early 90s were atrocious.
I believe that it took a generational dieoff to really force the domestic manufacturers to get off of their butts and get with the game. They could no longer count on the WWII generation with their outright refusal of all things Japanese to drive sales of inferior cars. The Americans have come a long way - but they must combat their poor quality image.
BTW, the Delorean wasn't a GM product - John DeLorean was ex-GM (best known for the Pontiac GTO).
You Germans had no choice. Americans can choose from Ford, Toyota, Honda, Hyundai, Volkswagen etc. Half the population wants nothing to do with Government Motors.
No, that's when the legislation mandating that all American wage-slaves must own a new Government Motors vehicle by date-certain or face fines and potentially prison gets signed by The Teleprompter.
If they can force you to buy health insurance, they can force you to buy cars.
LOL good 'ol Gubmint Motors! Baseball, hot dogs, apple pie and STUFFIN DA CHANNELS!
Dog,
I think I am not alone in the class of people that will simply never forgive GM for raiding the treasury in order to save its unionized bacon. I'll never buy another GM product. Never.
And if I am right, you can count on one of two things going forward...continued record channel stuffing, or massive layoffs at GM. It is one or the other.
**I am wondering when Doug Cass will finally relent and eat crow on his buy GM shares call**
Hell no, I dont think I'd even drive a new GM even if they gave me one for free! Instead I'd park it down the gulch, fill it with 'Tannerite', turn on the video cam for youtube and put a .308 into it!
Like i said recently on ZH. I looked at buying a diesel truck new and GM was offering it for like 2k cheaper than Ford. (Regardless of the fact I'm not actually going to buy a new truck, I still looked anyways). Even being cheaper I won't buy their shit. You can tell there was no thought and no innovation into their product. If you box up a turd and put a pretty bow on it all you get is a boxed turd with a bow.
+1, also Chrysler.
Companies to consider avoiding...
http://projects.propublica.org/bailout/list/index
http://www.hhs.gov/ociio/regulations/approved_applications_for_waiver.html
To be fair to a GM CEO, even if they wanted to do something they couldn't. Rough up the unions' feathers a bit too much, they shut down your plants which sends your stocks value down the next day.
no!! no way!! How could it be? lol....stupid mother fuckers
Time for dealers to start installing German parking garages....
http://www.scribd.com/doc/38318/German-Parking-Garage
Although that looks cool in theory, one wonders what sort of delays one could expect during peak hours on a busy Saturday afternoon.
the thing looks totally automated...once you remove humans from the loop, shit actually runs pretty efficiently.
It would, I wager, take less time than it takes the valets in a 3 story US garage to move the cars in front of mine around in order to get mine out.
Yeah fair enough, it might work as a valet replacement service, but I was thinking more in lines of vs a conventional car park.
hide in the trunk with your bungee LOL
Very bullish, obviously people are going to line up to buy GM vehicles this summer with $5 gas and a depression stretching into its 4th year.
Stuffing channels like DSK stuffs maids.
Phil La Bow. What a douche
Soon they will pay you to take a car for free.
Hey, I'd do it.
If only the economy expanded as fast as GM's channel stuffing.
OT:
let's not forget that today starts the beginning of hurricane season! oceans are radioactive and quite warm! am sure this will in no way impact any future job numbers!
Wonder if GM's going to start stuffing "slightly irregular" cars. You know, missing some inconsequential part like a door handle, an antenna, an axle, etc.
This is what I was wondering, especially given the supply chain issues that aren't going away anytime soon.
I'm reminded of the Michael Keaton movie Gung Ho, where they were rolling out shells of cars in order to 'make the numbers.'
Great fucking movie. Too bad Micheal keaton had no future after the late 80's early 90's. I could watch "Dream Team" over and over.
Great fucking movie. Too bad Micheal keaton had no future after the late 80's early 90's. I could watch "Dream Team" over and over.
Great movie! And who knew how prophetic it would be.
Americans soon wont be able to afford the gas let alone the car. Bottom 90% of us that is.
I wonder how much of these inflated inventories are chevy volts or should I say resold chevy volts.
http://www.thecarconnection.com/news/1060841_report-shoppers-cheated-out-of-7500-chevy-volt-tax-credit
I saw that story on drudge yesterday. It is pulled down today.
It wasn't enough to raid the treasury, but the company had to think of yet another way to rip money out of Average Joe's son's future tax bill. I think the desperation at GM must be rising exponentially as they recognize that they have betrayed the nation...and people, despite their short term memory problems, have not forgotten the GM bailout.
has to be way less than 1percent, they have not made enough to fill the inventory hole.
just pop by a dealer you will see trucks/vans/all manner of vehicles parked out into the cornfields.
If they gave me a free GM, I'd fill it with Tannerite and put a .308 into it, video it for youtube.
Gubmint Motors and their fascist CEO Obama can go to hell, bunch of thieves.
Waiting for the government to "take them private" again.
I have a feeling patience will not be required.
Hmmm, seems our Treasury Secretary is doing his part in re-election efforts. Check out his raison du jour in the Washington Post today.
http://www.washingtonpost.com/opinions/a-rescue-worth-fueling/2011/05/31...
p.s. check out the "most recommended" comments, & offer your own.
Maybe Bill Ayres wrote that op-ed also. see who wrote "Dreams of my Father"...
http://www.americanthinker.com/blog/2011/05/a_quick_look_at_media_reacti...
No need to worry. Chrysler paid back their goverment loan, all is good. EXCEPT Fiat took a loan from the energy department in order to pay back the treasury department. I dont know what's worse, that we're lending 3.5B to a foreign company or we're celebrating a company taking a loan from one dept of goverment to pay back another dept. of government.
http://washingtonexaminer.com/blogs/beltway-confidential/2011/05/truth-behind-chrysler-s-fake-auto-bailout-pay-back
how much worse is it for the banks to have "repaid" TARP and treasury loans with market funding under an FDIC guarantee of the debt?
Agreed
Great, a gas-powered version of housing's shadow inventory. By year end we'll see zero down, zero interest, zero payment for 5 years and financing for 10. Bad credit, no credit OK !
GM needs to add more dealers so they can accelerate channel stuffing!
Perhaps a dealer for every local government entity. That way, they can really focus on their fleet sales, making offers that no sane person could refuse, yanowhatimean?
I happen to like my suburban. But it is the only GM vehicle I'd buy.
When the Japs can build something that can haul my 4 kids, hockey gear, all their other shit and is built like a tank call me.
A vehicle that can carry 4 passengers and some sports gear. That's unheard of outside of GM. /sarcasm
should we get Shirikawa to agree to a $250 billion QE the dynamics of the global prisoner's dilemma will change promptly
Interesting number considering...
"A private think tank says the accident at the Fukushima Daiichi nuclear plant could cost Japan up to 250 billion dollars"
http://newsonjapan.com/html/newsdesk/article/89987.php
However Porsche just announced a 50% increase in US sales for May...so at least the rich are still buying expensive shiny things...
By Rajiv Sekhri
June 1 (Bloomberg) -- Porsche AG sold 2,817 vehicles in the
United States in May, a 50 percent increase over the year-ago
period, the carmaker said in an e-mailed statement today.
seein panameras and cayennes all over.
An abomination when a sports car racing company like Porsche is driving its sales from fucking poseur SUVs and 4 doors. When is the last time anyone saw a 911??
This morning...in my garage (a 1999 996 Cabriolet).
saw a carrera gt parallel parked in front of a bar on a college bar street in BFE... cannot fathom that thing ended the night without a ding/keying. Although, its driver almost certainly got laid.
GM will soon need more EPA regulations that will force customers into buying "morally-comforting-for-morons" hybrids. Washington will raise its purchases of GM's Vault (of taxpayer money) and the spin doctors will take care of the marketing. Might work for a while.
Obongo can order the entire federal fleet to be replaced with GM E85 SUVs and Volts, except for all the federal limos.
I see no problem with this chart.
It is clearly rising.
In our economy, rinsing is good.
It doesn't matter what is rising.
It is always good by definition.
http://www.bloomberg.com/news/2011-05-31/japan-faces-debt-rating-downgra...
GM Sales Fall 1.2% on Higher Gasoline Prices"Toyota, which built 45 percent of its cars in Japan last year, may report a 27 percent drop in May deliveries, the average of three estimates. Honda, the second-largest Japanese automaker by U.S. sales, may say sales fell 25 percent, the average of three estimates. Nissan Motor Co. deliveries may decrease 7.3 percent, the average of three estimates."
http://www.bloomberg.com/news/2011-06-01/gm-may-u-s-vehicle-sales-declin...
Toyota recalls 106K Prius vehicleshttp://www.bizjournals.com/memphis/news/2011/06/01/toyota-recalls-106k-p...
I think it might be useful to remind ourselves of why this bailout was done: to secure a vital voting bloc for our dear leader.
In the same token, let me relate an experience I had once with a former manager of mine. He'd come to the southeast from the rust belt. You would think that, having seen first-hand the havoc that the auto unions had wreaked (in concert with other factors), that he would have at least revised his viewpoints. Instead, it was all "unions guarantee a fair and safe wage, decent healthcare, good benefits, etc.".
I'm not suggesting unions aren't sometimes important; rather I'm just reminding folks of the kind of bull-headed nature of management in these auto companies, of which this guy once was at a very high level, and their inability to adapt to a changing reality.
Ford being, in my opinion, a developing exception.
By the way, I've always found it ironic that so many come to the southeast from economically ruined areas and almost immediately begin proclaiming what we should change, lest we not be "progressive".
It's the same with the millions of Clownifornians who have fled the Titanic and demanded that Texas become more like Clownifornia with more social engineering, bigger government, and higher taxes.
Have you driven a Ford lately? Top selling US vehicle...F150. Government Motors Keep up the hope on your Volt.
I actually love my 2008 F450. The Saudis must love it to, because when I'm pulling the RV I get a whopping 8 mpg.
Does anyone know what the dealer inventories were BEFORE GM went through bankruptcy? ie. How long before we hit *THOSE* levels.
Ford was in favor of the GM bailouts.
History .... nah not so much!
haha
So, it is a 43% increase in inventories in ONE YEAR.
GM's business plan for rebuilding was geared around the subprime market. That's right, the market that caused much of the termoil we are experiencing today was the center of their future strategy. With the aquisition of the largest subprime lender Americredit, GM was banking on taking this market to the next level. The plan was to put every stiff with a pulse, " Heartbeat of America" into one of their vehicles and reinflate a debt bubble using the very people that popped in the last one. What better way to increase sales by large percentages immediatly then to prey on those who are kicked below the knees and looking for that second chance...Give Me Another Chance also introduced programs on subprime leasing paper that uses high money factors for high back end profit margins initially to show immediate financial growth, yet these same leases are written with high residules on the cars so eventually the loss will have to be taken when the lease term is over. This plan was totally set up for instant gratification, like the introduction of the Kodak Camera that took the picture and after waiting only a few seconds the picture miracoulsly appeared. When the Government has their reputation on the line and "skin in the game", remember its always better to kick the can for 3 years and worry about the consequences later. However the plan hasn't worked to their expectations. Even though they are willing to take the risk on these people, most are not interested in the programs because they don't have a job or a place to live. They are more concerned about putting food on the table then driving a new Escalade with all the bling. What we are witnessing is Corporate America's failure to recognize a squeezed consumer. They have drained the pockets of the bottom 90% of Americans and their market has dried up. Even though they thought they could create a market, they can't. The numbers aren't adding up and soon they will realize that without jobs and an economy built on productive growth, there is no future for GM. Until the middleclass gets back on its feet, GM will lose. The middleclass is what made GM the company it once was and as it continue to descend in the abyss, so will GM. Just like the housing market, the Government can backstop it all they want however if there are no interested takers, all the support doesn't matter. The American dream that was sold to us for so many years no longer includes the new Silverado in the driveway and the pretty house with the picket fence and all the debt that goes along with it...
.
Sixty days was the target for dealer finished inventory, the numbers should be out in a few days. It will be interesting to see where the actual figures end up.
Dealers won't lower prices to sell cars. Now its at Window sticker MSRP with maybe a $300 discount to offset the Doc fee here in Massachusetts. $20,000 doesn't get you anything new anymore --- maybe it will get you a 2010 Honda Civic EX but a decent GM new car is at least $30,000. of course you can sign up for that $40,000 72 month car loan with nothing down
Dealers won't lower prices to sell cars. Now its at Window sticker MSRP with maybe a $300 discount to offset the Doc fee here in Massachusetts. $20,000 doesn't get you anything new anymore --- maybe it will get you a 2010 Honda Civic EX but a decent GM new car is at least $30,000. of course you can sign up for that $40,000 72 month car loan with nothing down
They have 7 year car loans now egad, I remember when 5 was the max. Even lease programs are back after they got their teeth knocked in.
OH, for Christ’s Sake!