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GM Channel Stuffing WTF!?
Those who have been reading our 2+ year series tracking the ridiculous "bottom-left to top-right" trend in GM dealer inventory channel stuffing, know all there is to know about the modern day equivalent of AOL (in which the purchases of modern equivalents of "dial up connections" are funded by loans from the US government itself), in both (non government backstopped) business continuity terms as well as in channel stuffing notoriety. Which is why we will present the November update of total dealer "inventory" (which rose to a record for the fresh-start company 788,194, or a record 99K increase in two months) a without commentary, except to say: WTF!?
Source: GM
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Where is "mark to market" for all this inventory? Never mind, I forgot it's "mark to fantasy". Just like Greek debt.
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HA, HA, HA.
" got my obama phone, my bama car, keep bama presedent for 3rd term, you know"
" got my obama phone, my bama car, keep bama presedent for 3rd term, you know" ... to get yer bama house.
Wow, they almost ran out back in July! Good thing those UAW folks are productive.
Only $67,000? Got my wife an 2004 Navigator on ebay (Texas Direct) 3 years ago for $15,000 w/53,000 miles. Runs like a top! Just like ordering a pizza too.
You paid too much.
Ponzi, totally.
From an earlier ZH thread:
Long new car storage lots
Long car crushers and short spare parts.
Edit: perfect storage lots bubble burst scenario.
China builds empty cities and malls. We build empty cars. The easter island people built those stern looking statues. Pacific islanders built those cargo cult airports and ports. Fascinating cultural particularities.
Quiet! I'm tryin' to tune my painted-rock™ radio to the local Salsa station...
Really? Cuz my pizza guy drives a brand new Escalade. Nicely equipped, of course.
And $15k is what that $67K Denali will be worth in 3 years...such a bargain!
Thought you wrote: got my wife and 2004 Navigator on ebay...
Hopefully his wife does more than 10miles to the gallon.
Constitution being treated as a cute old piece of paper rather than rule of the land, so why not 3rd term? Why not President for life? He'll take care of us all.
bama give me gubment kar, from GM. Ford sucks, corprate fat cats, for profit, you know.
if it wasnt funny id be crying. Constitution only works when its inforced. This guy has not and will not inforce a document he dosnt belive in. Obama will get a 3rd term. the sheeple will chear in the streets
http://www.forbes.com/sites/joannmuller/2012/12/04/10-reasons-gms-profit...
Irony...
Well fucking done....
For those here who understand how dealership "floor planning" works, and how manufacturer incentives and pressure influences dealership inventory levels (e.g. volume incentives, "holdback" cash, etc.), if you visit an area GM dealership, you can literally see the vehicles being stacked high and deep.
Now that it's December, the vehicles dealers have been pressured to take on in even larger volume in November & December is evident and the blow-out-the-metal-no-matter-what sales will be the tactic used to try and get rid of these vehicles.
This is especially true of Cadillac, GMC & Buick Dealers, where some of the least popular vehicles are piling high (and you can see the literal lease specials dealers are trying to move these vehicles to with anyone who has a pulse- forget the "nationally advertised" specials; at the local level we're talking genuine $0 down, sign & drive vehicles that have MSRPs of 30k for $199/month and Cadillacs that have 44k MSRPs for $0 down sign & drive for $339/month).
It's not just GM, either. Many dealers selling many other makes are stacking 'em deep and movin' 'em cheap. The heavily subsidized $0 down/sign & drive lease for any warm body having a FICO score of 500+ is becoming a larger & larger % of new vehicle "sales" in broke dick U.S. and manufacturers need to keep their lines moving since they've already cut down headcount so much that not building vehicles that aren't selling well without massive incentives would require them to idle entire plants.
A local bowling alley is now so full of cars from the dealer across the street, I don't think there's room left for any bowlers. Though they might have finally given up on that enterprise.
My gubbmint doesn't like bowling, says I might hurt myself with the ball. Down with bowling, long live the money/car printers.
that wouldn't be Amy Joy's in West Roxbury would it, lol?
+1, TIS
you don't happen to know how those stocks are financed? and if they are financed as "new, to be sold" or as "sold, to be collected by the customer"? I presume this is data that is very hard to obtain and probably you can see from the question that I'm not an expert at all
@TIS: btw, it's unbelievable, there is simply no comment of yours to which I disagree. evah. you are the best ;-)
I appreciate the high praise, but I think that it's more that ZH attracts realists who have finally spotted the irreconcilable differences between what the headlines, soundclips, statements & statistics produced by the Main Stream Media (including the sell-sider carnival barkers on cnBSc and Bloomturd), politicians and governmental "statisticians" claim is reality and what is actual reality.
At the very least, many here have been bothered by the cognitive dissonance enough to explore the red pill/rabbit hole. Just one very recent example:
Record, Blowout Black Friday (and Grey Thursday) Sales; Retailers In Heaven!!! Manna Raining Down!!!! Ooooops, maybe not...
Yeeeeahhhh, bitchez
By the way, many think that this can go on indefinitely, and they may be correct. I, however, honestly believe I'm seeing serious, signficant cracks in the foundation and wall of the massive concrete dam that I look both down & up above at, and maybe it's not the best idea to keep standing here.
Finance has never been the issue, in a marxist central planned economy we print as much credit as is needed so that the workers can get good wages and vote for the party.
"good wages"?!?!? LMFAO!!!!! What's the wage of the idiot leadership relative to those that actually do the work again fucknut? Better take another look at both the private and public sector, I see a lot of incompetent "leadership" that is grossly overpaid everywhere.
How about letting bad businesses and poorly run comapnies fucking fail for a change? novel concept eh? Let the leadership of those bankrupt companies pay back the creditors with their own wealth, not the taxpayer's.
Stupid fucking sheep.
Well said, I don't consider any business to be in the private sector if they're government contractors, or receive government subsidies. By this expanded (and accurate) definition, we have a pretty fucking tiny private sector.
TruthInSunshine,
Nearly time for another Cash for Clunkers to keep the new market going?
DavidC
It wouldn't surprise me. I can honestly say that for the first time in my life I have difficulty thinking of anything that would surprise me in an Amerika By, Of & For The Bankster Jackals & The Politicians/Legislators/Regulators & Other Government Employees/Unions That They Prop Up.
*This message brought to you by Warren "Let's Fuck The Taxpayers Really Good amIright Charlie Munger" Buffett
How can you be so against "free enterprise" Truth? ;)
"manufacturers need to keep their lines moving since they've already cut down headcount so much that not building vehicles that aren't selling well without massive incentives would require them to idle entire plants."
But the democrats said at their convention that they'd saved a million good American jobs! Oops, I guess the problems run way deeper than the latest political rhetoric, if anyone cares to slog through the BS...so Ds, Rs, how many of the thieves in the Wall Street banks have you put in jail yet? That's what I thought...
This. Long Ally. Who do you think finances 98% of that floor plan?
Silvershield should comment on this....
I am being stalked by my two local Chevy dealers because I looked at a car six months ago. We ended up buying a Nissan, but they won't stop calling me.
I have noticed a small rounded clear bubble that is located in the center of dashboard of every new GM car. It looks like a mini camera. Anyone have insight on this? I will try and post a picture.
I think it has to do with on star. I had a gm suv, before they were owned by Obama , and it had one.
"I had a gm suv, before they were owned by Obama"
LOL - Gubmint Motors...where 'saving' and creating jobs is "Job 1!" (OK, I'm mixing my US automakers... http://youtu.be/xZISPbKgbvw ("Qualify is Job 1!))
It's for detecting whether you are driving in daylight or night so the "AUTO" settings for your beams work.
Ahhhhhhh......paranoid fuck that I am.
How's it hangin? :>D
First time in a car with auto headlights, eh? Go check out any expensive german car, and you might find this same evil "camera" (grin.)
Facing up or towards the driver? The one that faces up is the light sensor for the auto headlights.
If there's any sort of bubble it was probably installed by the Fed
Hey my neighbor Mr. Creosote has one of those.
http://www.youtube.com/watch?v=aczPDGC3f8U
You're forgetting that the "shareholder bailout" was, and could only be, a one shot deal. However, the bailout of the UAW can and will go on ad infinitum.
I'm probably going to hold my nose and purchase a C6 corvette (The C7 will be introduced in January), but, just anecdotally, I'm seeing discounts on new C6s as steep as 20%.
Go to Autotrader.com
There are a shit load of "used" 2012 GM Yukon Denali AWD for sale.
Most of them 20% less than the "new" 2013
I'm waitning for the 100 year interest free loan.
Remember, when China does this we laugh at the idiocy of "Communism". When we do it, it's "helping industry".
Obama is paying back Richard Trumpka and his union supporters.
Well, maybe they are a bit irrationally exuberant about the prospects for car sales, but it’s just a good thing Obama isn’t stuffing the government with federal employees.
The federal government is being stuffed with "contract employees". They don't count as government workers for statistical purposes plus less pay and benefits than regular employees. Akin to calling a shit a turd and claiming it ain't a shit.
and will pay bonuses this year based on the huge 'sales'.
When we do it, it is also the idiocy of Communism. We use different words and have 4 year plans rather than 5.
Wrong. When we do it it is "the idiocy of fascism".
C'mon Tyler, you know as well as I that they (GM) are piling on for that huge holiday rush!
<fukin sarc>
Everytime this happens, somebody's mother gets a deposit in their Swiss account.
I can think of some mothers who should have never taken certain deposits. And others who need to stop, now.
Edit: This, on a post about channel stuffing.
"If you build it..."
Field of Dreams indeed
sdmjake,
"...they will come"
They most certainly will; with their bon-er-usses.
GM: Driving America...
into the ground...
Chevy runs deep.™
Inventory runs deep.
GM: Driving America...
Off a cliff...
Define fresh start.
Same shit new pipe.
yeah but do they have a car that can read my fucking brain waves?! (see mercedes)
No but they certainly have a lot models that fuck us (as taxpayers).
+1
Yeah Obamacars..you get a car and you get a car and you get a car..everybody gets a car!
And with the car comes a loan and with the loan comes debt and with debt comes control.
Nail impacted on head.
Not with a free Obama car! People need cars for emergencies, go to a job or a job interview, and simply stay connected with friends and family.
America would be a less downright mean place if we had automotive justice and equality.
IN SOVIET AMERICA, CAR GETS *YOU*.
Does it come with O'bamaphone?
they should do a big giveaway for the 1 millionth GM car stuffed on a lot ...
We should have a ZeroHedge party for this!!!!
Tyler,
How does this comapre to the long term average? Do we have those stats going back many years?
Thanks,
They got fewer dealers now, so inventories must go up, right??
+1
Without the numbers before the subprimes crisis this data has not a lot of value.
http://online.wsj.com/mdc/public/page/2_3022-autosales.html
I am not Tyler, but had the same reaction. The link above show how stupid the inventory really is. Tyler put it exactly...WTF?
Who bought the one Maybach sold in October. That you Tyler?
I'm sure they are to the point where they are storing them in a field some place like they were just before bankruptcy.
look south of Henderson, NV
I recommend that they salvage brand new produced cars, that way they can give an impression of "Recovery"
So far the dealers are selling the oldest new cars to themselves as "used." LOL
That's been going on for some time:
Ports of NJ are cars as far as the eye can see.............ALL GM.
Auto fema camps? I see a trend.
Or maybe they put them in warehouses where they used to store... oh what did they call it?
Food.
Epic!!!!!
FUBAR!!!
If your only tool is hammer, everything else is a nail. GM makes, although rather poorly, cars and trucks. That's it. Moreover, their employees feel entitled to fat salaries and fat pensions. Now pay up.
What happened to "innovate or die" you ask? Bailouts that's what. Enjoy your unintended consequences america.
I'm not a bit sure they were UNINTENDED...
That's what happens when a fucking Ineptocrats run the fucking country and print @ zero cost.
"innovate or die" - is just a slogan. An innovation is ALLOWED to happen only if it pushes the current (unsustainable) system ahead ( to the cliff ). The Bailouts are just the consequences of the lock on power expressed in the sort summary below.
A true innovation IS DISRUPTIVE technology, it may be social, but if so, it is termed REVOLUTION.
A true innovative/disruptive technology is NEVER allowed to develop, for it disrupts the balance of power in the current industrial system, and of course, this is what everyone in control of some power or wealth threatened, will fight to protect. This is valid, everywhere in the industrial world, but especially magnified in the U.S. of A where, the monetary and the political power is concentrated on the corporate level and defends a century of accumulated wealth.
GM new slogan,
"Bend over America, you're getting driven to Cleveland".
Chicago
Detroit.
Short GM and UAW
Did you hear ? All new hand held gadgets come with cool photo apps. Photos, photos and more photos. Getting faker by the day. That is all that is selling, pictures of shit. And food of course.
Hungry?
Here's an Instagram of a plate of mashed potatos and fried chicken smothered in gravy! Enjoy!
This will doubtless be spun by mongoloid talking heads on TV as a further sign of recovery. The dirty little secret for aut makers is they of course book sales and profits when the cars leave the factory not the lot. This will blow up in their faces eventually. Listening to CNBC this morning on my 40 minute drive to work - I almost was feeling good about the economy lmao. Thanks for the does of reality (aka kool aid repellant).
Recall a few years ago, when Daimler was finishing killing chryser. The Obese "joltin" Joe Eberhardt mandated overproduction to the point that chrysler had no place to park unsold vehicles. In the ensuing collapse JOe was rewarded by the teutonic dildos with a string of Mercedes dealerships to manage.
Am so saddened that the increase was not >99K
else, I would have bought GM stocks
I drive by the plant in Lansing. The rail cars for transport have now been arranged in front of the lot to hide the massive inventory . My local GM dealer expanded his storage to a lot at the mall next door. What would the PMI and ISM be without the stuffing????
Need a good natural disaster to wipe out all that excess inventory. I should stop haarping on.
What will they do with all the excess? Sell it on eBay?
Cash for Clunkers 2 - stuffed channel gets an enema.
Maybe there will be a terrorist attack that just happens to destroy all this inventory, or perhaps a boating accident.
The GM dealer near me has cars and trucks parked on top of each other..epic fail! and they are Re modleing every GM dealership! = bwahahah.
All of the Taco Bells around here have remodeled. It's like a real restaurant now!
*facepalms*
We'll know it's over when Carl's Jr. starts selling the Extra-Big-Ass Taco.
Now all the car dealers need to do is take a lead from the banks and start trading cars with each other. That'll get those sales figures up.
We are not too far from cars as currency.
Sandy didn't wipe out enough cars & trucks eh?
Gotta keep the tractor factories running ya know!
I need to order more checks, Im running out of money!!
Why didn't Hostess get a bailout? Oh yeah, it's in Texas.
Load up the Yukons with Twinkies and maybe they'll start flying off the lots.
Mr. Owl, how many Twinkies can you fit in the back of a Suburban...? The world may never know.
Send more Volts to US Embassies!
Was it FDR or Truman who ordered milk to be poured out en masse to prop up milk prices for dairy farmers??? I'm just thinking maybe someone should be driving GM cars off the Brooklyn and Golden Gate bridges to help things along. Thelma? Louise? Anybody?
FDR did all sorts of crazy shit. Dunno 'bout Truman. He was likely too busy listening to Pendergrast to care.
host a nation-wide community destruction derby
Now that the election is over you can expect a huge reversion back to the median.
"Corporations" are just hosts for the parasitic MBA/business elites to suck dry while laying waste to the equityholders. All condoned and sanctioned by the their lackeys in DC. After all it's what they are getting "paid" for.
My office building has plenty of parking spaces I'll lease to GM. Give me a call...
In 2013, the US gov't will buy new cars for all federal employees. Then, the federal reserve will announce an asset purchase program that will include GM vehicles. Suddenly, the reason that all those hedge funds decided to stuff GM into their portfolios will make sense.
Just when you think things can't get any weirder and more corrupt, they absolutely will. Just wait for it.
das volkswagon
Its all about the endgame.. theyre making these cars at 2012 prices so they can sell them at huge premiums once hyper-inflation kicks in.
Ironically, GM dealers moved lots of used inventory earlier in the quarter. Heard that some GM plants were going to see "imposed vacations" due to inventory glut.
But please don't call it a furlough.
What are total US car and light truck inventories? Interested in the big picture, not just GM. Anyone have a link?
Somebody check Steven Ratner's colon. There's a possibility that a couple of Volts have been stuffed up there.
<loudspeaker> Senator Fwank please report to Mr. Ratner's office for a colon check!
London:
1903 - 11,500 horse cabs (7,500 hansoms; 4,000 4-wheelers).
1914 (pre-War) - P.S.V.s (Public Service Vehicles) - 3,000 motor buses, 3,000 electric trams - less than 100 horse trams left, 7,000 motor cabs, 1,300 4 - wheeled Clarence and Growlers, 200 Hansoms.
Wonder what happened to all those horses? Perhaps there's a reason meat pies & sausages are a British speciality.
Google's self-guided car could drive the next wave of unemployment (Guardian, take with salt)
Fun article! I loved this (from Google's co-founder):
That's great! Someone is finally recognizing the plight of the underserved intoxicated people of our world.
The "channel stuffing" is Sandy's fault. All those unbought cars because of the hurricane.
Barry did ask for $50 Billion in his budget "compromise".
They should give away a Nobel Prize in Economics with every purchase of a GM vehicle.
They should give away a Nobel Prize in Economics with every purchase of a GM vehicle.
Why so gloomy? GM has been stocking up since 2009, the chart indicates each November is at least 100k more cars in inventory than the year before. They are anticipating the economy to taking off and are positioned to make a killing... Sooner or later this yearly bet has to pay off.
/sarcasm/
Okay, based on the wsj and the above graph, it would appear that gm is producing at an annual rate of nearly 3 million vehicles, while actually selling just over 2.1 million.
Question 1: What percentage do large vehicles make up that 778K of channel stuffing?
Question 2: Are similar numbers of vehicles on lot being reported by other companies?
The Toyota dealership in Joplin Missouri seems to be storing vehicles on lots several blocks from the dealership as well as behind the dealership and on the dealer lot itself. If this is going on for more than just GM then the auto industry as a whole is headed for a major meltdown when things really go south. As it is, you can't take a part off a 2012 and put it on a 2011, the OEM changes won't let you, which means you have to buy the OEM part with the two screws instead of just the one.
These vehicles will be purchased by your local and state governments...as well as fed. Look around your county and city, every city, county, and state vehicle is a chevrolet or dodge. Back before the government took over GM/Chrysler every local county and city vehicle around me was Ford. Just saying, I could care less what my local city, county, and state purchase but since the bailouts I have noticed that all city/county vehicles are chevrolet and that goes for my surrounding area.
Yep,
almost all dodge chargers, durangos, or like our sheriff department, loads of tahoes. Our city cops do have a couple of taurus. The highway patrol is all chargers now. Sheriffs still have a couple crown vics.
Starting in 2013, Federal Tax refunds will be given out in GM bucks.
Question for Tyler: Has GM's gross sales in terms of dollars been the same for the last 4 Novembers?
Maybe a better question to ask what has been GM's gross sales of units and dollars been since 2009? I ask since that recent article proposed US GDP was shrinking in terms of percentage to world output. Would this be a real indicator of inflation?
You wouldn't think they had too many on lots if you were shopping for one right now. With tax time coming up it is time to buy something to depreciate by year end, as is usual business. My moms 09 tahoe is up for replacement, so I've been shopping. The tahoe stickered around $52k, paid exactly $10k less. Purchased in Novemeber 09 as a 09 model with 10 models on the lot. Now he has lots of 12's on the the lot, lots of 13's on the lot, and they have shit for rebates. I mean, you can take 0% for however long, but a measily $4k rebate on a 12 model in december. They don't really want to sell one I guess. Gotta have a 6k gvwr to meet the bush tax cut standards for accelerated depreciation.
Cmon ZH, if you are going to buy back the financing arm to hide these kinds of numbers more effectively, you have to show the government some growth. Now the gov is wanting out of GM even at a loss on their 32% stake in this pig so we are in full "lipstick mode".
How would one find an historical comparison to what these numbers really should show in a 'normal' trend?
There was a time when GM dealerships would park their overflow inventory in the grass of the neighboring lots. Back then they would lease the extra space from the land owner. These days GM owns the neighboring lots and is having them paved over to hold their massive inventory. And the moral of this story is: If you can't sell cars, get a government loan and buy land instead!
If GM drove each car right out of the factory and into the compactor - they would probably lose less money...
LOL'd at this one. Thanks for the visual!