GM Channel Stuffing Hits New Record

Tyler Durden's picture

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.